The US economy is recovering slower than expected. US oil prices returned to the positive zone on Tuesday after falling below $ 0 for the first time, but international benchmark Brent fell.
West Texas Intermediate (WTI) crude for May delivery CLc1 was up $38.99 in thin trade at $1.36 a barrel by 0622 GMT after settling down at a discount of $37.63 a barrel in the previous session.
The May contract expires on Tuesday and the more-active June contract CLc2 rose 94 cents, or 4.6%, to $21.37 a barrel.
Oil prices, which have experienced a 30% decrease worldwide, are suffering from the impact of the chain reaction caused by coronavirus, the travel restrictions and other inconveniences. The storage areas allocated for strategic oil reserve purchases of countries, which are adopted as a temporary treatment method, are also filling and crude oil stocks are growing. Another problem in the USA is the lack of storage capacity. The delivery point of the West Texas Intermediate (WTI) contract, Cushing, Oklahoma’s main US storage center, is expected to fill in a few weeks.
Following the collapse in oil prices, the US began to see Saudi crude oil imports as a way to help the drilling industry.
The group known as OPEC +, the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to reduce its production, including Russia, by 9.7 million barrels per day (bpd). However, this will not happen before May, and the volume of the cut does not seem large enough to maintain the market balance.
In light of the above, due to the limited stocking possibilities, supply and stocks are expected to contract in the second half of the year, and there may be interestingly high prices associated with it.