WTI futures closed down 9.4% at US$ 23.63 per barrel, accelerating losses in the latter part of the session.
The drop in oil prices that occurred this Tuesday (07) was due to a combination of factors: first, the excess supply; second, the weak demand for fuels. Both consequences are interconnected with the current pandemic of the new coronavirus.
As if the aforementioned reasons were not enough, there is the possibility that the largest global producers of commodity reach an agreement to cut pumping. Which makes investors even more fearful.
U.S. crude futures closed down 9.4% (or $2.45) at $23.63 per barrel, having accelerated losses later in the day. While Brent crude futures ended the day at $31.87 per barrel, down 3.6% (or $1.18).
The declines have been increasing as the market awaits the publication of the weekly US inventory report, maintaining expectations of an increase of 9.3 million barrels, accompanied by an increase in reserves of refined products.
“I can’t think of a scenario, at all, that would be a bullish situation,” said Bob Yawger, director of energy futures at Mizuho. “It’s going to be a massive build in oil, it’s going to be a massive build in gasoline.”
Some of the world's biggest oil producers, including Saudi Arabia and Russia, plan to meet on Thursday to discuss supply cuts. However, several energy ministers have said they will do so only if the United States joins the pact with its own cuts, sources told Reuters.
“The market is indicating that it wants a little more certainty about whether the Russians and Saudis are going to strike a deal to limit supply,” said Gene McGillian, vice president of market research at Tradition Energy.
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