Posted 20 апреля 2020,, 06:44

Published 20 апреля 2020,, 06:44

Modified 24 декабря 2022,, 22:36

Updated 24 декабря 2022,, 22:36

US oil price is ready to go negative

US oil price is ready to go negative

20 апреля 2020, 06:44
The cost of the oil futures for the Texas brand WTI fell in the Asian session by 20%. The trading upon May contracts is less than $ 15 per barrel - this is the lowest rate since the end of the last century.

The fall in the prices from the highs that were reached before the OPEC+ meeting is already more than $ 10. Several factors are the reasons of the collapse. American storage facilities are already nearly full, and tankers are the only alternative. But oil extracted in Texas does not have access to the sea, and therefore its transportation formes additional expenses that are completely inexpedient in the absence of the demand for the raw materials.

According to Bloomberg, American shale producers are ready to sell their fuel in the physical market even for $ 2. Perhaps, very soon it would be necessary to pay extra to the customers in order they could collect black gold from the overflowing tanks.

Negative prices were already fixed at the end of March. Then Wyoming Asphalt Sour sold for minus 19 cents.

The futures for the coming months are cheaply traded, but the June contract is already 40% more expensive. However, it also bears losses - about 5%.

In early March, OPEC member countries and its partners did not agree to further reduce production by an additional one and a half million barrels per day. Saudi Arabia insisted on a decline, but Russia opposed. The inability to agree led to a rapid drop in oil prices and the subsequent surrender of Moscow in the oil war - the Russian Federation agreed to cut production more than anyone else. Falling oil prices hit an 18-year low.

The imbalance is caused by the USO's largest oil exchange fund, which holds the next futures for almost $ 4 billion - that is, 150 million barrels. Before the expiration of contracts, he is forced to sell May futures in order to acquire June. And this causes such pressure on the cost. But now the fund has announced that the investment declaration will be amended. Now the funds will be distributed under contracts with different deadlines.

On the London stock exchange WTI lost almost 9%, gaining a foothold at around $ 22.84. The reference Brent there was $ 26.94, down 4.06%.

As for Russia, here, we note, there are also almost no free oil storage facilities. Oil traders use tankers, the cost of which is becoming more expensive, and in some places it rises in price seven times. The possibility of storing oil in railway tanks is currently being considered.