West Texas crude oil futures for May and physical delivery contracts were traded at negative prices, albeit with low volume, one day before the expiry day.
In yesterday evening’s transactions, contract holders avoided physical delivery due to storage difficulties, causing investors who wanted to close their positions to be unable to find buyers in contracts with one day to expiry.
With this development, WTI’s May futures contract fell to minus 37.6 dollars yesterday. The June futures contract, the most active maturity, lost 22 percent compared to the previous close and reached $ 13.
US President Donald Trump, who made a statement after the rapid decline in the oil price and the panic in the market, stated that it is “short-term” to see crude oil prices below zero dollars in the country due to the effect of the new type of coronavirus (Covid-19) epidemic, and noted that they will buy 75 million barrels of crude oil.
After the statement, the active maturity of WTI rose to $ 15, while the barrel price of Brent oil, which decreased by 7.5 percent yesterday to $ 25.5, continues its downward trend in Asian markets today, albeit limited, and is traded just below $ 25.
Analysts stated that the decline in economic activity due to the Covid-19 outbreak reduced oil demand, while ongoing production caused storage problems. Noting that the cost increases as storage capacity decreases, analysts said that investors who do not want physical delivery and expiry closing transactions cause panic.
The shock in oil prices also had a negative impact on equity markets, especially on energy giant company shares and funds. In the US, the Dow Jones index lost 2.44 percent, the S&P 500 index 1.79 percent and the Nasdaq index 1.03 percent.
As in every panic situation in the markets, it was seen that the demand for dollars increased again yesterday and the dollar index exceeded the 100 level.
European stock markets, which closed before the acceleration of the decline in oil prices, followed a favorable course yesterday. The DAX index in Germany gained 0.47 percent, the FTSE 100 index in the UK 0.45 percent and the CAC 40 index in France 0.65 percent.
Today, with the effect of the fall in oil prices and the panic atmosphere caused by the fall in oil prices, a selective course is being followed in Asian stock markets. Near the close, the Nikkei 225 index in Japan lost 2 percent, the Shanghai Composite index in China 1.3 percent and the Kospi index in South Korea 1.5 percent.
In Turkey, the BIST 100 index, which tested above 99,000 points yesterday, which analysts described as resistance, ended the day at 98,945.88 points, up 0.78 percent compared to the previous close. The dollar/TL, which closed at 6.9398 yesterday, is trading at 6.9450 at the opening of the interbank market today.
Analysts reported that although the shock in the oil market has been overcome for now with the closure of the May futures contract and Trump’s statements, the course of prices and news flow will be followed more closely in the following period.
Stating that the news about the Covid-19 outbreak continues to be decisive on the direction of all markets, analysts said that Germany’s ZEW indices stand out in today’s data agenda.
Analysts noted that in technical terms, 99,000 and 100,000 levels are in the resistance position, 97,000 and 95,500 are in the support position in the BIST 100 index, while the 6.90-6.96 band will be followed in the USD/TL exchange rate.
The data to be followed in the markets today are as follows:
11.30 UK, February unemployment rate
12.00 Germany, ZEW expectation indices for April
17.00 US, March second-hand home sales
Source: https://www.aa.com.tr/tr/ekonomi/kuresel-piyasalara-petrol-soku/1812435
