Even as governments worldwide are taking tentative steps towards reducing restriction on movement to help economies rebound, fuel demand remains weak. This comes as worries grow over the possibility that the promised oil production cuts will not be enough to meet up with the plunge in demand caused by COVID-19 pandemic.
Economic concerns continue to plague the market. Beijing's oil imports from the United States, the world's nominal top producer, remained near zero in March 2020 after collapsing last fall due to the trade war, but are expected to ramp up later this year following the signing of the phase one trade agreement.
United States oil futures, which dictates fuel prices in North America, led losses after United States crude inventories rose to 518.6 million barrels in the week to 17 April, near an all-time record of 535 million barrels set in 2017.
Bank of China Ltd.'s estimate for the cost to retail investors from the collapse in a product linked to USA crude oil futures surged 11-fold to more than 7 billion yuan (US$1 billion) as it consolidated reports from its nationwide network, according to people familiar with the matter.
After the latest changes, USO will hold contracts expiring as late as June next year, a drastic reappraisal of its previous strategy that focused nearly entirely on heavily traded near-term contracts.
Nevertheless, both crude oil futures' prices had marked up their third straight week of losses with Brent crude winding down the week 24 per cent lower and the US West Texas Intermediate crude oil futures off around 7 per cent.
Hedge funds boosted their net-bullish position to the highest in eight weeks in the week ending April 21, despite the market decline.
The ETP, which lost 39% of its value last week, was down 11.7% in premarket trading at $2.28 on Monday. In the end, the contract holders had to pay to have it taken off their hands.
The Industrial and Commercial Bank of China (ICBC) said it will suspend all open positions for retail investor products linked to commodities futures, including crude oil, natural gas, copper and soybeans, from Tuesday.
USA oil futures led losses on fears that storage at Cushing, Oklahoma, could reach full capacity soon. However, inventories only increased 0.5% from Tuesday through Friday.
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