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The drop in prices of contracts whose expiry is imminent reflect the moribund demand for oil and the current saturation of American storage capacities at a time when the majority of economies are still paralyzed by the containment measures.
Last week, US crude inventories rose 19.25 million barrels. Short of storage solutions on national soil, the baOil which cannot be found is sent abroad by sea freight. According to the IEA, demand for black gold is expected to decline by 12 million barrels per day in the second quarter. OPEC and its allies agreed to a reduction of 9.7 million bpd in May and June, clearly insufficient to offset the collapse in demand in a context of globalized lockdown.
A less pronounced drop in Brent prices
On a one-month horizon, investors are less cautious, presaging a recovery in demand, even if prices still show sharp drops. The number of new cases of coronavirus patients in Europe and the United States has stalled since last week, and countries are beginning to prepare for the deconfinement of their populations. For the same WTI, the prices of the contracts for the month of June and July were respectively at $ 22.24 and $ 27.4, or down by 11.47% and 6.95% respectively.
On the European side, the price of Brent (Oil – Crude Brent) fell “only” by 6.7% to $ 26.23 for the contracts of the month of June, and by 5.9% for those of July to 29.7 $.
In Europe, the equity markets evolved without trend this morning. This afternoon, the CAC 40 (France 40) lost around 1.1% to 4445 points. In Frankfurt, the Dax 30 (Germany 30) lost 1.46% to 10,460 points, and in London, the FTSE 100 fell 0.76% to 5,744 points.
European stock markets are moving cautiously, starting a busy week with financial publications on both sides of the Atlantic. The reluctance of operators is accentuated by the violence of the movements on oil.
In France, on the CAC 40, a dozen companies will lift the veil in the coming days on their quarterly results. Those of Danone SA, Peugeot SA and Kering are expected tomorrow.
In the United States, approximately 20% of S&P 500 companies will publish their results, including Netflix Inc (All sessions), IBM, Snap, Coca Cola, or Gentex.
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