On Monday, the Asian market opened. According to Reuters's quotation, WTI crude oil futures rapidly expanded its decline, once falling to more than 5%, the lowest level since 20011,and then the decline intensified, plunging 7% and falling below the key 17 USD mark.
Last week, U.S. crude oil fell for five consecutive days, and it surged on Friday. The oil price once fell below the 18 mark, hitting a low of 19 years 17.26 dollars.
The Asian oil price continued to decline and is currently at a low point in the past 20 years. The previous production reduction agreement reached by the largest oil producer has little impact on the demand damage caused by covid 19, and traders are increasingly worried that crude oil will soon lose storage space.
ABN· Amro said in the report: "Some people may have expected that this unprecedented production reduction agreement will lead to soaring oil prices. But this did not happen. " The bank also said that the market has digested this factor after US President Trump said that it is expected to reach an agreement in early April.
ANZ's research department said in a report: "People continue to worry that storage facilities in the United States will run out of capacity. Since the beginning of March, the inventory of Cushing, the pricing point of West Texas Intermediate, has increased by nearly 50%. "
Affected by overcapacity, the United States announced last week that domestic crude oil inventories reached190,000 barrels, the largest crude oil inventory in history. At present, American oil drilling platforms, drilling rigs and other related industrial chains are all trimming and reducing production to tide over the market crisis of imbalance between supply and demand.
At the same time, investors in crude oil futures have withdrawn from long positions in May, because the surge in US inventories has reached a record high, and this summer will face the test of exhaustion of oil storage facilities. According to data from the U.S. Department of Energy, the storage capacity of oil storage tanks in Cushing, Oklahoma is now 69%, up from 49% four weeks ago.
In addition, the futures price of WTI crude oil is much higher than the spot market price, which is called premium, which can encourage traders to store oil.
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