KUALA LUMPUR, April 28 – OCBC\u00a0Treasury Research says it expects crude oil prices to continue to trade at the current depressed levels through the second quarter of this year as\u00a0the market is still in a state of abyss.<\/p>\n
On April 20, the United States\u2019 benchmark\u00a0West Texas Intermediate\u00a0(WTI) crude\u00a0futures collapsed to -US$37\u00a0a barrel,\u00a0a first in the history of oil prices.<\/p>\n
OCBC said last week\u2019s implosion appeared\u00a0to be a result of poor management from the US Oil Fund\u2019s (USO) inability\u00a0to execute a high volume of rollover from May to June within the short span of a week.<\/p>\n
It was also due to a\u00a0long squeeze from US physical buyers, who realised that the Cushing Hub ran out of storage space too late, the research house said.<\/p>\n<\/div>\n
Nevertheless, OCBC believes\u00a0such market mismanagement is unlikely to happen again in the short term.<\/p>\n
\u201cWhile we expect prices to remain depressed, we do not see the economic justification for a benchmark crude oil to be trading at negative prices,\u201d it said in a note today.<\/p>\n<\/div>\n
OCBC added that the mood in the market remains\u00a0highly bearish and uncertain, with no clear indication of\u00a0when demand might\u00a0return and storage set to run out by the end of the second quarter of 2020.<\/p>\n<\/div>\n
– BERNAMA<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
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