SINGAPORE | The price of american oil bounce Wednesday in early trade in Asia, after the plunge in history that has seen them plummet to below zero by reason of the collapse of demand due to the pandemic of sars coronavirus.
The price of a barrel of West Texas Intermediate (WTI) for delivery in June climbed Wednesday morning, from 10% to 12,68 dollars, after having suffered heavy declines on Tuesday in New York.
A barrel of Brent North Sea for delivery in June lost about 3% 18,73 dollars, reversing the trend after having risen by about 2 % in early trading.
“The gloomy sentiment will certainly maintain the price floor in the short term, until we see the light at the end of the tunnel with the gradual recovery of economic activities at the stop around the world,” said Jingyi Pan, a strategist at IG.
The oil market is ravaged by the restrictions put in place around the world to stop the spread of the COVID-19. With transportation severely restricted, and many plants shut down, the energy demand has collapsed. The refineries have significantly slowed down their pace and stop buying as much crude.
The price of a barrel of WTI for may delivery, which expired Tuesday, fell on Monday for the first time in negative territory, investors are reduced to pay the buyers to sell their crude at the risk of ending up with barrels in their backyard.