Jump to content
Sign in to follow this  
Platinum Wealth

American oil crashes below $0 a barrel -- a record low

Recommended Posts

US oil prices plunged, falling below $0 Monday to $-37.63 a barrel. That's the lowest level since NYMEX opened oil futures trading in 1983.


The selloff can be attributed in part to market mechanics. The May futures contract for West Texas Intermediate, the US benchmark, is about to expire.

 

Most investors are already focusing on the June contract, thinning out trading volume and feeding volatility, UBS analyst Giovanni Staunovo said.


The June futures contract for WTI is trading around $22 per barrel, but that's still sharply lower on the day. Brent crude futures, the global benchmark, fell 8% Monday to $25.81 per barrel.


The extreme pressure on the WTI contract for May highlights ongoing concerns about the supply and demand dynamics plaguing the oil market.
"No one in America wants oil in the short term," Jeffrey Halley of Oanda told clients on Monday.


Saudi Arabia, Russia and other producers tried to prop up prices with a deal last week to slash production by 9.7 million barrels per day in May and June, the deepest cut ever negotiated. But that isn't expected to soak up the supply glut caused by evaporating demand for energy.


Oil storage facilities are still at risk of overflowing, raising the chance that some oil producers in the United States and Canada could start paying customers to take crude off their hands, according to Staunovo.


Investors are particularly worried about storage reaching capacity in Cushing, Oklahoma, the main US hub.
Rystad Energy, a consultancy, forecasts that US commercial crude stocks will hit all-time highs by the end of April and will continue rising into May.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

×
×
  • Create New...