ETF Areas to Gain From Plunging Oil Prices
Zacks Investment Research | Apr 28, 2020 04:20AM ET
The year 2020 has been a hard one for oil, with the commodity losing around 80% so far. Despite the biggest OPEC+ output cut deal in mid-April, May West Texas Intermediate (WTI) crude futures plunged below zero for the first time in history on Apr 20. After a brief period of rebound, oil prices have started to decline again due to concerns over storage capacity. In fact, oil prices declined nearly 25% on Apr 27.
Oil markets have been struggling with drying demand due to coronavirus-induced shutdowns, still-ample supplies and most importantly, storage crisis. The current storage crisis seems so critical that the U.S. producers are now delivering crude to the nation’s emergency stockpile, per a Bloomberg report.
Oil prices also suffered in March on a price war between Saudi Arabia and Russia. OPEC+ producers’ inability to crack an output cut deal and Saudi Arabia’s announcement that it will pump more oil sparked the war.
Fearing the moving of near-term contracts into the negative territory again, S&P Dow (NYSE:DOW) Jones has announced plans to roll all of its WTI contracts for June into July on Apr 28, per a Bloomberg article. United States Oil Fund (NYSE:USO) LP Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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