Oil plunge: U.S. drilling is filling up storage tanks, sending the price of West Texas Intermediate crude plummeting
FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford
“This is part of the deflation process,” said Murray Gunn, head of global research at market forecasting firm Elliott Wave International. Those preparing for worse to come see a slew of more fundamental problems ranging from oil speculators going bust to the destruction of the U.S. shale industry and a credit crunch if energy firms’ bad debts grow and banks tighten their belts.
“Then the question is do they then start re-evaluating other things? So, all commodities trading, copper, the whole shebang ... we’re reading the fundamental collapse as something not just for oil but for everything.”The price crash also reflects the near total absence of energy demand - once regarded as constant.
“This price doesn’t work for anyone, but it’s unclear to me what more can be done without getting a ‘fix’ on the virus. I suppose oil has tested positive for COVID-19.” “Every economic data estimate as we got closer got more apocalyptic and in every case so far they weren’t bearish enough,” said Grant Williams, author of Things That Make You Go Hmmm... and portfolio and strategy advisor to Vulpes Investment Management in Singapore.
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