BREAKING NEWS: US oil plunges below zero for first time ahead of expiry
by ChemOrbis Editorial Team - content@chemorbis.com
A day ahead of expiry, May contract for the US oil benchmark West Texas Intermediate (WTI) on NYMEX collapsed to below zero for the first time ever on Monday amid an oversupplied market and a sharp contraction in oil demand caused by the coronavirus pandemic.
The historical drop in WTI futures came as traders hurried to sell off their positions before the front-month contract’s expiration due on Tuesday.
According to CME Group data, the soon-to-expire May contract on NYMEX settled at minus $37.63/barrel while the June contract for WTI settled at $20.43/barrel. Contract prices at minus levels mean that some producers are paying customers to take oil off their hands.
The huge sell-off in WTI coincided with growing oversupply concerns. The US Energy Information Administration’s (EIA) recent report on oil stocks and working storage capacity showed an increasing volume of oil at Cushing, Oklahoma, the delivery location for the US benchmark.
At 54.9 million barrels as of April 10, totals stocks at Cushing storage hub stand 42% higher from a month earlier.
The historical drop in WTI futures came as traders hurried to sell off their positions before the front-month contract’s expiration due on Tuesday.
According to CME Group data, the soon-to-expire May contract on NYMEX settled at minus $37.63/barrel while the June contract for WTI settled at $20.43/barrel. Contract prices at minus levels mean that some producers are paying customers to take oil off their hands.
The huge sell-off in WTI coincided with growing oversupply concerns. The US Energy Information Administration’s (EIA) recent report on oil stocks and working storage capacity showed an increasing volume of oil at Cushing, Oklahoma, the delivery location for the US benchmark.
At 54.9 million barrels as of April 10, totals stocks at Cushing storage hub stand 42% higher from a month earlier.
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