Crude Oil Recovers some of its Losses

On Wednesday, crude oil jumped over forty (40) percent as the black gold recovered some of its losses from a volatile week. The oil futures contracts still remain on the back foot and trading at low price levels not seen in decades. Nearly twenty years.

This pressure is coming at a time when global demand is being crushed by the Covid-19 pandemic. The global supply glut as swelled. Storage tankers are full and nobody is buying oil as businesses and global travel remain restricted or closed.

The West Texas Intermediate (WTI) crude oil futures contract, for June delivery, added 19 percent or $2.21 to close at $13.78 per barrel yesterday. Earlier on Wednesday the WTI contract had been at a low of $10.26 before gaining over 40 percent, at one point. It hit a session high of $16.20 per ounce.

The international Brent crude oil futures contract gained 5.38 percent to close at $20.37 after breaking below $16 per barrel at one point.

Oil has lost over 70 percent in 2020 so these small moves equate to high percentage gains. At the start of the year, the WTI contract was trading at $60 per barrel but Covid-19 has seen demand evaporate and prices crater.

Crude Oil Traders Monitor Events in the Gulf with Iran and the U.S.

President Donald Trump, on Wednesday, tweeted that he had “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.”

Supply disruptions in this area could boost the price of oil and added to the gains seen yesterday.

Some of the gains disappeared as the U.S. Energy Information Administration (EIA) released weekly inventory data. For the week ending 17 April, inventory in the United States rose by 15 million barrels.

This is below last week’s gain of 19 million barrels but still a large gain nonetheless.