US oil plunged by 30% • Reason: Reports indicate that the physical location for storing oil barrels is shrinking, and that oil producers may again be left with surpluses • US and European aid programs are leading capital markets • Rise in Tel Aviv
US oil storage tanks // Photo: AFP
Oil is plunging again, but the stock markets continue to rise. As of yesterday evening, WTI US oil fell 30% and traded at $ 12 a barrel, which is slated for sale in June.
It should be noted that last week, at the peak of the crisis, this kind of oil traded at a low of $ 7 a barrel, while the May contracts recorded a negative price. Brent oil traded at $ 20 a barrel - down about 8%.
The sharp decline is reportedly due to the fact that the physical location for storing oil barrels is shrinking, and there is a possibility that oil producers with surpluses will lead to an additional negative price. This scenario shows that investors are skeptical that the world will return to a full life routine in the coming month, which should in turn also lead to fuel consumption at a level familiar to the Corona crisis. In addition, China's big bank has announced that it is suspending options on oil-tracking devices - a step that is interpreted as a distrust of the market that could lead to huge losses.
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Meanwhile, Wall Street's trading week opened up about 1% in all the leading indices, largely thanks to the $ 3 trillion fiscal bailout programs and the Federal Reserve's more than $ 2 trillion cash flow. The White House announced yesterday that it is forecasting a dramatic contraction in the economy following the Corona, at 30% -20% in the current quarter (April-June).
This is the saddest figure since the 1929 crisis. Most of the indices recorded increases, and TA 35 and TA 90 were up 0.6% and 1.2%, respectively. Conversely, the oil and gas index was down 3%, in line with the global trend. , And the banks by 1.3%.