Crude oil shot into space. + 35% in 10 minutes.

On Thursday, April 02.04.2020, XNUMX Petroleum she experienced a "rebirth". The price is rising sharply due to information from Saudi Arabia that the country's authorities want to convene an urgent meeting of members of the former OPEC + group. It is known that it is about limiting the extraction of the raw material, for which the demand has been reduced by the coronavirus pandemic.

In recent weeks, crude oil prices have broken price records. Of course, the records are not very pleasant for its producers, because the coronavirus pandemic has pushed the records to lows that have not been seen for many years. Due to the restriction of flights, the demand for aviation fuel fell by 2/3. The economy of virtually all countries has slowed down, borders have been closed, departures from home have been limited, some companies have not operated to this day, many work in a limited way, and millions of people stay at home, not going anywhere. No wonder that the prices of "black gold" were the cheapest a week ago since 2003. The barrel has already cost less than $ 26. On Monday, March 30.03.2020, 20, only $ 90 was paid for a barrel of WTI crude oil in New York City. But it was also influenced by the price war of the largest producers. Both Saudi Arabia and Russia announced that they would not cut production, so prices were at the bottom, as the daily demand for oil fell by XNUMX. barrels.

Additional fee for collecting oil Wyoming Asphalt Sour

It even happened that the worst quality raw material, which can only be used to produce asphalt, was sold at… negative prices. Some producers have nowhere to gather the raw material for which they are not willing. So the oil goes to the tankers, all possible reservoirs are flooded.

Bloomberg agency informed that in March we even had a negative transaction. How it's possible? The producer decided that he would rather pay extra $ 0,19 to a barrel of Wyoming Asphalt Sour oil than pay for its storage. This is the worst sort of oil used for asphalt.

Brazil and Norway have announced that they can only accumulate five-day reserves, then it will be necessary to stop production, which is not only very expensive for companies, but also risky. In some shafts it can't be done without losing the highest quality oil and millions of losses.

USA: from war to conversation

Crude oil prices on April 02.04.2020, XNUMX were strongly shaken from the morning when it turned out that US President Donald Trump was threatening Iran. Already two weeks ago, he said he would respond "in due time"if oil prices are too low. And when he began to talk about the alleged threats from Iran, which he would have to respond to, many investors received this as an official announcement of military action. And when they focus on the countries that produce oil, the price of raw material always increases by leaps and bounds. For now, however, this is only muscle flexion, but on the same day it turned out that the conversation between the US President and the authorities of Saudi Arabia did not end in a fiasco.

The official media of Saudi Arabia has announced that their country wants to convene an urgent meeting of the former OPEC + group. Recall: OPEC + brought together 24 countries, oil producers, but officially ceased to exist on 31.03.2020/XNUMX/XNUMX. Russia is blamed for its disintegration and has decided that, despite the coronavirus pandemic, it will not limit its extraction.

The announcement of the willingness to meet and unofficial information about the reduction in production caused a 20% jump in the price of crude oil within five minutes from the announcement of this information after 16:30. 40. In the next XNUMX minutes, the price of crude oil rose by more than XNUMX%. Stock indices also started to grow, although in their case it was "only" a few percent.

Currently, the price per barrel Crude stabilizes around USD 30 with the balance of increases at today's session by approx. + 19%.

Crude oil chart, H4 interval. Source: xNUMX XTB xStation