Oil Prices Surge One Month After Hitting Zero - Bloomberg:
For the world’s most important commodity, there’s never been a month like it.
Just a few weeks ago, crude oil was akin to industrial waste in some parts of the world, something you had to pay people to take away. Now prices are surging, up about 70% in New York since the start of May.
The turnaround, which has been welcomed from Riyadh and Moscow to the White House, came quicker than most people were expecting but wasn’t easy. Painful OPEC+ production cuts and the world’s risky first steps out of coronavirus lockdown have lifted the market out of the abyss of negative prices, but either of them could falter.
“I think the worst is behind,” said Pierre Andurand, chief investment officer and founder of Andurand Capital Management LLP. “OPEC+ cut enough, and demand will slowly, gradually recover.”
It was the afternoon of April 20 when panicked sellers drove the price of the U.S. crude benchmark below zero for the first time in history. In one of the most extraordinary 20-minute spans in the history of financial markets, West Texas Intermediate fell as low as minus $40.32 a barrel, stunning everyone from veteran brokers to retail investors.
For the world’s most important commodity, there’s never been a month like it.
Just a few weeks ago, crude oil was akin to industrial waste in some parts of the world, something you had to pay people to take away. Now prices are surging, up about 70% in New York since the start of May.
The turnaround, which has been welcomed from Riyadh and Moscow to the White House, came quicker than most people were expecting but wasn’t easy. Painful OPEC+ production cuts and the world’s risky first steps out of coronavirus lockdown have lifted the market out of the abyss of negative prices, but either of them could falter.
“I think the worst is behind,” said Pierre Andurand, chief investment officer and founder of Andurand Capital Management LLP. “OPEC+ cut enough, and demand will slowly, gradually recover.”
It was the afternoon of April 20 when panicked sellers drove the price of the U.S. crude benchmark below zero for the first time in history. In one of the most extraordinary 20-minute spans in the history of financial markets, West Texas Intermediate fell as low as minus $40.32 a barrel, stunning everyone from veteran brokers to retail investors.
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