Oil Bounces Back After Fund Switching Drives Wild Gyrations
By Sharon Cho
and James Thornhill
April 29, 2020, 1:33 AM GMT+3 Updated on April 29, 2020, 7:06 AM GMT+3
S&P Global told clients to sell WTI crude for June delivery
Futures gain 14% after declining 27% in past two sessions+0.67+7.05%
Oil climbed after losing more than a quarter of its value over the past two days with volatility likely to continue on concern prices may drop below zero again as investors and a major fund exit the June contract.
Futures added 14% in New York after dropping Tuesday as S&P Global Inc. told clients to immediately sell their stakes in West Texas Intermediate for June delivery into July crude. That followed a move by the biggest oil exchange-traded fund to exit near-term contracts as swelling stockpiles force investors to confront the possibility that there won’t be any space for physical barrels.
The American Petroleum Institute reported U.S. crude inventories at Cushing, Oklahoma, the delivery point for WTI, rose by 2.49 million barrels last week, according to people familiar with the data. UBS Group AG predicts the key storage hub may reach its capacity limit next month.