Oil Plunges Back Below $12 With ETF Sell-Off Adding to Pressure - Bloomberg:
Oil slumped below $12 a barrel as the biggest oil ETF said it will sell out of its June WTI futures position, adding to the downward pressure from a huge glut.
Futures in New York slid as much as 30%, snapping a four-day recovery and deepening losses after the U.S. Oil Fund’s announcement. While U.S. drilling is sliding and Saudi Arabia has started reducing output ahead of the start date for OPEC+ supply cuts, an immense surplus of oil means storage tanks are close to capacity around the world. South Korea, which holds the fourth-biggest commercial storage capacity in Asia, was said to have run out of onshore space.
With a number of producers commencing output cuts, some of the huge discounts seen in physical markets have eased, particularly in Europe. Swaps markets in the North Sea and Russia were trading stronger last week, though there’s still plenty of cause for pessimism. On a global level, the swelling glut is set to test storage capacity limits in as little as three weeks, according to Goldman Sachs Group Inc., with traders, refiners and infrastructure providers seeking novel ways to hoard crude, including on tiny barges around Europe’s petroleum-trading hub, and in pipelines.
Oil slumped below $12 a barrel as the biggest oil ETF said it will sell out of its June WTI futures position, adding to the downward pressure from a huge glut.
Futures in New York slid as much as 30%, snapping a four-day recovery and deepening losses after the U.S. Oil Fund’s announcement. While U.S. drilling is sliding and Saudi Arabia has started reducing output ahead of the start date for OPEC+ supply cuts, an immense surplus of oil means storage tanks are close to capacity around the world. South Korea, which holds the fourth-biggest commercial storage capacity in Asia, was said to have run out of onshore space.
With a number of producers commencing output cuts, some of the huge discounts seen in physical markets have eased, particularly in Europe. Swaps markets in the North Sea and Russia were trading stronger last week, though there’s still plenty of cause for pessimism. On a global level, the swelling glut is set to test storage capacity limits in as little as three weeks, according to Goldman Sachs Group Inc., with traders, refiners and infrastructure providers seeking novel ways to hoard crude, including on tiny barges around Europe’s petroleum-trading hub, and in pipelines.
No comments:
Post a Comment