US oil price crashes to record low as coronavirus hits demand | Financial Times:
Benchmark US oil prices crashed towards $1 a barrel on Monday, as the collapse in demand caused by the coronavirus pandemic leaves the world awash with so much crude, and so little available storage capacity, that producers may soon be paying for buyers to take it off their hands.
West Texas Intermediate, the US marker, lost 92 per cent on Monday, with the price of oil for delivery next month sinking to a low of $1.02 a barrel, on warnings that traders were struggling to access storage capacity at the refinery hub of Cushing, Oklahoma, which is expected to be maxed out within weeks.
CME Group, the exchange operator where WTI trades, took the extraordinary measure on Monday of saying prices could even turn negative for the current contract, which expires tomorrow. That means producers would be paying buyers to take their oil to try and forestall the shutdown of fields ahead of their rivals.
The price crash is the latest indication of the depth of the crisis hitting the oil sector. Lockdowns imposed in many of the world’s major economies have sent crude demand tumbling by as much as a third, leaving the industry facing what Jefferies analyst Jason Gammel called perhaps “the bleakest oil macro outlook” he had ever seen.
Benchmark US oil prices crashed towards $1 a barrel on Monday, as the collapse in demand caused by the coronavirus pandemic leaves the world awash with so much crude, and so little available storage capacity, that producers may soon be paying for buyers to take it off their hands.
West Texas Intermediate, the US marker, lost 92 per cent on Monday, with the price of oil for delivery next month sinking to a low of $1.02 a barrel, on warnings that traders were struggling to access storage capacity at the refinery hub of Cushing, Oklahoma, which is expected to be maxed out within weeks.
CME Group, the exchange operator where WTI trades, took the extraordinary measure on Monday of saying prices could even turn negative for the current contract, which expires tomorrow. That means producers would be paying buyers to take their oil to try and forestall the shutdown of fields ahead of their rivals.
The price crash is the latest indication of the depth of the crisis hitting the oil sector. Lockdowns imposed in many of the world’s major economies have sent crude demand tumbling by as much as a third, leaving the industry facing what Jefferies analyst Jason Gammel called perhaps “the bleakest oil macro outlook” he had ever seen.
No comments:
Post a Comment