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by Sissi Bellomo
3 ‘reading
The fall of Wti oil in the abyss of sub-zero prices seemed an aberration linked to technical issues. But the market has not collapsed after Monday’s terrible session, the worst in history.
The notorious WTI futures for May, which had plummeted more than 300% to close at -37.63 dollars per barrel, recovered somewhat in its last trading session, characterized by very thin volumes: the contract finally expired – closed in positive territory, about $ 10. However, the sales tsunami carried over to other contracts, the most active, for delivery in June., overwhelming not only Wti but also Brent.
US crude oil prices fell nearly 70%, to a low of $ 6.5 a barrel, before recovering around $ 12, while Brent plummeted below $ 20, reducing its value by approximately a quarter: a performance that is particularly worrying, since the international benchmark should not suffer the same problems as the WTI.
North Sea crude oil can be easily loaded on board tankers and physical delivery is not even essential because the cash position can be adjusted to maturity in the future.
Many operators are baffled by the downward violence given the absence of significant developments in the market. There is a suspicion of storage speculation: Strong hands that control residual space in tanks, especially in Cushing, the WTI delivery point, where residual capacity is small but does not yet exist.
