WTI CRUDE OIL MARKET TREND

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The current pandemic Covid-19 affected the Oil Market tremendously.  Brent Oil surges to 21% and WTI Crude Oil plunges 45%.  The crude oil is now trading around 29 dollars per barrel mark, which is 18 year record low level.  During the month of April 2020 OPEC member countries have agreed upon to cut down the production by 10%.  Russia also agreed to cut down the production substantially.  It is also estimated that overall GDP may go down to 6%,  since GDPs of China, India, Russia like countries may go down to 5-8% as compared to previous quarter.  The oil consumption in the entire globe has declined due to the current pandemic covid-19 and lockdown, which also impacted the demand. 

Further, it is envisaged that oil production has to be further reduced due to lack of storage capacity, since excess supply and less market consumption.  The countries like China and India which are considered to be the major importers of crude oil will be putting a halt on their crude oil import.  As many of us know that in an unprecedented event, the NYMEX WTI prompt contract for May plunged to a historic low on 20 April and traded at a negative price for the first time ever.  The oil price remained volatile in April amid high uncertainty related to global oil demand and swelling global crude oil stocks, as well as global oil supply developments.  Under these circumstances, it is imperative to say that the crude oil prices will remain under pressure and may go down for another 2 weeks.  Hence it is advised that no long position in crude oil is opined.  The aggressive traders may short crude oil cautiously since it may remain volatile.  The crude is expected to trade around 23 – 25 dollars mark this week.


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