The Malaysian Palm Oil Council says B20 biodiesel demand is weakening because US WTI crude turned negative on 20 April 2020. Crude suppliers are running out of storage as the pandemic cuts oil demand.
Cheap crude makes palm-based biodiesel less competitive, which removes a source of palm oil demand and pressures prices.
After 51 past bearish macro events, Palm Oil moved a median -1.3% over 5 sessions (35% higher; middle half -4.1% to +1.1%), and -1.8% over 20.
After 565 past bearish macro events, Crude Oil (WTI) moved a median -1.4% over 5 sessions (41% higher; middle half -5.9% to +3.0%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Negative WTI crude weakens the economics of palm biodiesel (B20), reducing industrial demand for palm oil.