Skip to main content

US oil rebounds above $14 after massive sell-off

US oil prices rebounded above $14 a barrel on Wednesday, a day after a sell-off sparked by a major fund selling its short-term holdings of the commodity amid virus-triggered storage concerns.

West Texas Intermediate, the US benchmark, for June delivery jumped 14.5 per cent to $14.13 a barrel in Asian morning trade.

It had plunged by more than 21pc at one point on Tuesday after the United States Oil Fund — a major US exchange-traded fund (ETF) — started selling its short-term contracts of the commodity.

Brent crude, the international benchmark, was trading 3.27pc higher at $21.13 a barrel.

Traders "are bargain hunting after a couple of days of massive sell-offs", OANDA senior market analyst Jeffrey Halley told AFP.

ANZ Bank said in a note that the market was hit by volatility on Tuesday "as ETFs and index funds moved contract positions amid renewed concerns of negative prices" in short-term holdings.

The Oil Fund had sold its contracts due to expire in June to move into longer-dated holdings amid fears about storage space running out in the short term.

Following the US ETF's move, Standard & Poor's also told clients to sell their stakes in the June contracts and move them into July, ANZ said.

S&P operates the GSCI commodity index, which is tracked by pension funds and other big investors. Other indices, including the Bloomberg Commodity Index, took similar steps.

Oil prices have fallen to historic lows this month, with WTI crashing deep below zero for the first time as governments worldwide shut down businesses and air travel grinds to a halt due to the virus.

Read: Q&A: Oil prices go negative. What does that mean?

An agreement by top crude-producing nations to cut output by 10 million barrels a day from May 1 has done little to calm the market.

The production cuts "will probably take weeks to show up in the physical market, hence we are still stuck with the inventories issues that will continue to curb any semblance of bullish appetite", said AxiCorp global market strategist Stephen Innes.



from The Dawn News - Home https://ift.tt/2KHHOZZ
via IFTTT
Labels:

Comments

Post a Comment

Popular posts from this blog

IT ministry forms panel to review social media rules

ISLAMABAD: While uproar against the new rules to regulate social media continues from various segments of society, including parliamentarians, the Pakistan Federal Union of Journalists (PFUJ) and civil society, the information technology ministry on Friday formed a committee to review the rules. The federal cabinet approved the rules on Feb 11, but later after opposition from various quarters, including companies that manage different social media platforms, the prime minister announced that a fresh consultation process would be launched over the Citizens Protection (Against Online Harm) Rules 2020. The committee formed by the IT ministry is headed by Pakistan Telecommunication Authority Chairman Amir Azeem Bajwa while its members are Eazaz Aslam Dar, additional secretary of IT; Tania Aidrus, member of the Strategic Reforms Imple­mentation Unit, Prime Minister Office; and Dr Arslan Khalid, focal person on digital media at the PM Office. Federal Minister for Human Rights Dr Shireen Ma
Post a Comment
Read more

Young girl’s tragic story makes her symbol of Yemen war

Buthaina Mansur al-Rimi’s life has changed drastically since last year — orphaned in Sanaa, the little girl controversially ended up in Saudi Arabia for medical care and has just returned to Yemen’s capital. Her entire immediate family was wiped out in an air strike by a Saudi-led coalition that backs Yemen’s government, using an explosive device Amnesty International says was made in the US. Images of Buthaina’s rescue and a picture of her swollen and bruised at a hospital trying to force open one of her eyes with her fingers were beamed worldwide. That international fame saw her become something of a propaganda pawn in the war between Yemen’s Iran-backed Huthi rebels and Saudi media. “I was in my mother’s room with my father, sisters, brother and uncle, the first missile hit, and my father went to get us sugar to get over the shock, but then the second missile hit, and then the third,” she says. “And then the house fell,” adds the little girl, who says she is eight. It was the
Post a Comment
Read more