China News Network client Beijing, April 29 (Zhang Xu) On the 27th, the world's largest ETF fund US Oil Fund announced that it would sell all US WTI crude oil futures June contracts (main contract). Affected by this, WTI crude oil futures June contract fell 24.56% on the same day, Beijing time WTI crude oil futures June contract fell more than 20%.

　　At low oil prices, in addition to lack of investor confidence, energy companies are also struggling. On the 27th, the US Diamond Submarine Drilling Company declared bankruptcy, which was already the second large US energy company that went bankrupt in April.

　　Many organizations believe that if demand cannot pick up and the oil storage space is constantly filled, negative oil prices will reappear.

On the 28th, the June contract of WTI crude oil futures continued its downward trend. Data source: Yingwei financial situation

Demand is weak, oil storage space is urgent

　　Under the epidemic, the crude oil market is facing a huge challenge of steep decline in demand and the lack of crude oil storage space.

　　OPEC's latest monthly report shows that global crude oil demand is expected to fall by 6.9 million barrels per day in 2020, and crude oil demand will drop to its lowest level in 30 years. Research data from the Japan Institute of Energy Economics is even more pessimistic. It predicts that the global city blockade in the second quarter will lead to a drop in oil demand of 18.1 million barrels per day.

　　Shipment tracking company Kpler data shows that global fuel oil demand has dropped by 30%, and storage space is becoming more and more precious. As of last week, about 85% of the global land storage space has peaked.

　　The world's authoritative financial analysis agency S & P believes that the remaining storage capacity of global crude oil and other energy sources is 1.4 billion barrels, of which the remaining storage capacity on land is about 1 billion barrels and the remaining storage capacity on the sea is about 400 million barrels. Even considering OPEC's full production cut, these storage spaces will be used up within 2-3 months.

　　In Fujairah, UAE, there is oil stored in the Middle East market. Recently, Malek Aziz, the business manager of Fujairah Oil Terminal, said that there is no room for excess oil.

　　The world's largest oil producer, the United States, is also rapidly filling up its crude oil reserves. How much is the capacity of the United States?

US commercial crude oil inventories. Data from: Jinlianchuang

　　According to Xi Jiarui, an analyst of Jinlianchuang, the total remaining domestic crude oil inventories (including commercial, Cushing and strategic reserves) in the United States total 151 million barrels.

　　US Energy Information Administration (EIA) data shows that as of the week of April 17, the average daily output of US crude oil was 12.2 million barrels; the total processing amount of US refineries averaged 12.456 million barrels per day; the net import of US crude oil was 2.047 million barrels per day .

　　"If the US crude oil data does not change much on this basis in the next few weeks, then the daily crude oil remaining in the United States is 1.591 million barrels, and the remaining crude oil inventory will be full only for 95 days." Xi Jiarui Said.

US crude oil futures fell to around $ 10 / barrel, negative oil prices may reappear

　　Most analysts believe that low oil prices will continue, and even negative values ​​will appear again. After suffering losses last week, US Oil Fund, the world's largest oil trading product, said in a statement on the 27th that it will further extend its positions to the far-month contract and sell all WTI crude oil futures June contract positions.

　　On the same day, the June contract of WTI crude oil futures tumbled 24.56% to close at $ 12.78 per barrel. On the 28th, the WTI crude oil futures contract fell by 20% in June, and as of press time, it fell by 18% to $ 10.48 per barrel.

　　"Due to an unprecedented collapse in demand, oil prices may remain at very low levels in the current quarter," Commerzbank said last week that US crude oil was even more problematic due to storage problems. "The June contract of WTI crude oil futures will expire in less than four weeks, and the oil price may appear negative again before expiration."

　　Domestic institutions also hold the same view. Dongxing Securities pointed out that the epidemic has greatly affected the consumption of US petroleum products. The daily output of US refineries dropped to 12.8 million barrels, down 24% year-on-year, the lowest level in nearly three decades. Demand has shrunk and shale oil production has not dropped significantly. Cushing ’s crude oil inventories have reached 76% and will soon be filled by crude oil in mid-May. The WTI crude oil futures June contract still has the possibility of breaking zero.

　　Anxin Strategy Research pointed out that although negative oil prices cannot accurately reflect the current economic fundamentals, they still cast a shadow on the future of the global economy. Affected by factors such as oil production technology on the supply side, geopolitics, production reduction agreements, and other factors such as the global economy on the demand side and the operating rate of Sino-US refineries, oil prices may rebound slightly from the current extremely low level within 2 months, and In the next 1-2 years, long-term lows hover.

Crude oil companies are struggling, and the second US energy company goes bankrupt within the month

　　In the era of low oil prices, crude oil companies are struggling. In April alone, two US energy companies have declared bankruptcy.

　　On April 1, US oil giant Whiting Petroleum Corp. filed for bankruptcy protection and became the first large-scale shale oil company to fall in low oil prices. As of the close of trading the day after it declared bankruptcy, Huiting Petroleum's share price was only 31 cents. In the past year, Huiting's market value has evaporated by 98.84%, with a market value of only $ 28.39 million.

Data source: British is financial situation.

　　On April 27, Diamond Offshore Drilling, Inc., headquartered in Texas, filed for bankruptcy. Diamond Subsea Drilling Company stated that its operating conditions have deteriorated sharply in recent months. The company listed $ 5.8 billion in assets and $ 2.6 billion in debt in its bankruptcy application, of which $ 2 billion was bonds. The company's cash on hand is only about $ 434.9 million.

　　Diamond Subsea Drilling Company has an important business in the Gulf of Mexico. As of the end of 2019, the company had about 2,500 employees, and its revenue in 2019 was slightly less than $ 1 billion. It is mainly engaged in subsea drilling business and provides contract drilling services for the energy industry. It has about 30 offshore drilling devices, such as semi-submersible drilling rigs, jack-up drilling rigs, and dynamic positioning (DP) drilling vessels, which are floating in the world. Provide services in the drilling market (ultra-deepwater, deepwater and mid-level waters).

　　According to US media reports, in addition to the above two companies, other oil companies in the United States, including Chesapeake Energy, Danbury Resources and Callon Petroleum, have also hired debt advisers.

　　Xi Jiarui believes, "It can be seen that under the double pressure of low oil prices and epidemic conditions, this year the US energy industry will usher in the most severe cold winter, and its oil industry chain will also usher in a new round of baptism." (End)