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Monday (20) before the US stock market. In the US, WTI May futures continued to drop deeply, once falling to nearly $ 11 during the day, bringing the positive differential between May and June futures contracts to $ 10, a record since 2008.
As of 7:00 p.m. on Monday (20), WTI crude futures in May fell below $ 12 a barrel, and the intraday decline expanded to 38%, temporarily reported at $ 11.26. per barrel, continuing to break the new low since 1998, crude oil futures in June The decline also expanded to 10%, temporarily reported $ 22.34 per barrel.
It’s worth noting that the June futures contract has a premium of up to $ 10 over May, the highest since 2008.
In addition, Brent crude futures also fell to 6.34%, temporarily reported at $ 26.30 a barrel, and continued to hover at a new low of almost 18 years. However, compared to WTI crude, the price trend for Brent crude is relatively stable.
Market analysis pointed out that the most fundamental reason for the drop in oil prices is the serious imbalance between supply and demand. The new coronary pneumonia forced countries to issue travel restrictions, so demand has decreased significantly. According to data from the International Energy Agency (IEA), demand for crude oil is expected to decrease by 29 million barrels per day this month. The sharp decline in demand has brought the oil storage space of the US Cushing Oil Center to full capacity. The US Energy Agency. USA (EIA) noted that Cushing’s inventory has been increased 48% to approximately 55 million barrels.
However, compared to WTI crude, the price of Brent crude is relatively stable, as traders choose to close positions ahead of June contracts to avoid forced liquidation on the expiration date, resulting in a large number of sales in May. , Triggering a sharp drop in oil prices.
According to Robbie Fraser, commodities analyst at Schneider Electric, there is a big difference between the crude oil spot trend and contracts in the months below the futures curve. The price of the July WTI futures contract is approximately $ 12 higher than the May contract.
The high premium underscores the tremendous pressure currently facing the spot market. Ole Hansen, head of commodity strategy at Saxo Bank, said: “The futures premium shows the problem of insufficient space for oil storage. Bulls are now reluctant to risk being unable to store, and are anxious This is a sign of oversupply in the market, which will bring more pressure for oil producers to cut production.For buyers and sellers, storage space will become increasingly expensive.
Phil Flynn, senior market analyst at Price Group Futures, said: “Because demand is still slow and OPEC + output reduction is not fast enough, the May contract is entering the worst state of delivery of the story. “
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