US crude has been particularly hard-hit because of storage problems, as WTI is delivered at a single, inland point, although the sell-off has now spread to Brent. — Reuters pic
In another day of volatile trading, US benchmark WTI surged in early Asian deals while Brent also edged up on news that top producers had held talks — only for prices to suddenly change course. On Monday, WTI for May delivery collapsed to an unprecedented low of minus US$40.32 as traders scrambled to sell it before the contract expired yesterday, but could find few buyers with storage capacity fast filling up.Analysts said the morning bounce was driven by news that members of exporting group Opec, as well as some allies in the Opec+ grouping, held a teleconference yesterday — but grim reality soon returned to the markets.
“The overtly bearish sentiment may well keep prices suppressed in the near-term until we find the light at the end of the tunnel with progressive resumption of halted economic activities across the globe,” said Jingyi Pan, a market strategist with IG.