US oil prices fell 7% on Tuesday. 36.76 is at the level of 76. It was the worst day of crude and the lowest price in almost three months. At one point, the oil was down as much as 9%. For the first time since the end of June, the world benchmark Brent crude bar has fallen below 40 dollars.
“Demand is low,” said Robert Yaver, director of energy futures at Mizhoho Securities. The supply is on. “Existing economic laws on both sides of the spectrum are being violated.”
“It’s a double-blink warning signal,” Yavar said. “There is an OPEC-type panic today, sending a bad signal to the OPZ community.”
‘Avalanche of selling orders’
The latest upheaval in the oil market comes during a major upheaval in the stock market.
Jeff Wyle, an energy analyst at Newberger Burman, said oil was being caught in a risky trade. He added that “nothing has changed” in the basic supply / demand picture for oil “to warrant such a drop.”
Just as investors are hitting exits in tech stocks, they are not betting on crude oil.
“Everyone is trying to get out together. There’s an avalanche of sell orders,” said Mizuhona Yawar.
Investors are also rushing into oil stocks.
Poor air travel demand is disappointing
With this epidemic, the price war between Russia and Saudi Arabia, this spring oil prices skyrocketed. U.S. Oil prices also turned negative for the first time in a short time, ending at 40 40 a barrel.
The good news for oil bulls is that demand for gasoline has fallen sharply.
Road traffic is almost complete and Bank of America hopes that global oil demand will continue to grow positively year-over-year with the use of roads in the next few months. That helped lift the national average gasoline price to 2.22 a gallon, down from a low of 7 1.77 at the end of April.
That’s why Bank of America warned in a report late last week that it would take three years for global oil demand to “normalize”.
“Global oil demand is really sluggish,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets. All the lesser fruits of global oil recovery have stalled.
When will the crude bottom?
Trun warned that fundamentals in the oil market are likely. “Will continue to be weak through the fall.”
So how low can crude go?
The U.S. estimates that crude will not fall far below $ 30 a barrel as OPEC resumes at that time.
“I don’t think we’ll go to the abyss again like spring.”
Coffee enthusiast. Travel scholar. Infuriatingly humble zombie fanatic. Thinker. Professional twitter evangelist.
