Relief. The Energy Report

There is no doubt that the Russian and Saudi price war destroyed any shred of credibility they had as the global stabilizer of oil. Instead of acting to soften the economic blow from record demand destruction from the coronavirus, they let their egos allow the oil market to cause the world more economic pain. They used this crisis to gain more power and market share at the expense of the world community that is facing deaths and economic destruction from this virus. Instead of stabilizing the market, they created a situation where oil market volatility is at an all-time high.

THE EIA confirms the fact that oil volatility is at an all-time high. “Crude oil prices have fallen significantly since the beginning of 2020, largely driven by the economic contraction caused by the 2019 novel coronavirus disease (COVID19) and a sudden increase in crude oil supply following the suspension of agreed production cuts among the Organization of the Petroleum Exporting Countries (OPEC) and partner countries. With falling demand and increasing supply, the front-month price of the U.S. benchmark crude oil West Texas Intermediate (WTI) fell from a year-to-date high closing price of $63.27 per barrel (b) on January 6 to a year-to-date low of $20.37/b on March 18, the lowest nominal crude oil price since February 2002. Crude oil prices have fallen significantly since the beginning of 2020, largely driven by the economic contraction caused by the 2019 novel coronavirus disease (COVID19) and a sudden increase in crude oil supply following the suspension of agreed production cuts among the Organization of the Petroleum Exporting Countries (OPEC) and partner countries. With falling demand and increasing supply, the front-month price of the U.S. benchmark crude oil West Texas Intermediate (WTI) fell from a year-to-date high closing price of $63.27 per barrel (b) on January 6 to a year-to-date low of $20.37/b on March 18 (Figure 1), the lowest nominal crude oil price since February 2002.

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Disclaimer: Past results are not necessarily indicative or future results.Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a ...

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