New York, USA.- The price of Texas Intermediate Oil (WTI) opened on Monday with a 38.59% crash, to $11.22 a barrel, its lowest level since 1998, in the face of a 38.59% scourge of demand from the COVID-19 pandemic, and the proximity of contract expiration. At 9.15 New York local time (13.15 GMT), WTI’s future contracts for delivery in May, expiring tomorrow, were down $7.05 from Friday’s session, delving into the downward trend in pre-market negotiations aimed at recording the worst-in-history day for US reference crude.
For contracts due in June, where trading volume is higher, the fall was around 11% and the price was $22.29. Analysts said, the crash is due to fears of a lack of capacity in the U.S. to store crude oil amid the abysmal cut in demand caused by the stoppage in coronavirus activity. To get the latest news about coronavirus, sign up by clicking on this space and we’ll send you the information instantly.
The intraday destruction of today’s WTI is epic in scale and shows the great instability of the May 2020 contracts in the face of their expiration tomorrow and the fears that storage cannot materialize,” said analyst Louise Dickson of Rystad Energy.
With the price of the Brent barrel at about $27, the firm’s analysts nonetheless invite to look at the WTI-Brent dispute taking into account the prices of WTI’s June contracts as the benchmark futures in Europe change month before the Americans explain. The market remains volatile even though OPEC and its partners agreed in early April to reduce its production by 9.7 million barrels per day to compensate for that cut in COVID-19-linked demand, which investors do not seem to believe is sufficient.
