Monday will become part of the trading history. The fact is that today, May futures for WTI oil have fallen below $ 15 per barrel. Thus, the decline has amounted to about 20% the last time the market observed similar figures in 1999.
The reason is obvious and expected – investors fear that soon there will be lack of storage for oil, since global demand for “black gold” remains extremely low.
It is known for a fact that in the United States there were cases when oil was sold for nothing, or rather, for $ 2 per barrel. Some analysts suggested that manufacturers would have to pay extra to customers. Such a situation no longer seems fantastic.
It is ironic that today, European Brent crude oil has fallen by only 1%. There is price discrepancy in WTI futures for May and June (June prices have fallen by only 5%).
We all remember that most recently, the countries included in OPEC+ have been able to agree on an unprecedented reduction in world production. The drop in energy prices continues despite the deal. We can logically conclude that only the recovery in demand can support a falling market. It should be noted that the demand recovery is possible after the end of the quarantine in key countries.
So, at 7.15 Moscow time, June contracts for Brent crude oil were trading for $ 27.88. This is 0.75% lower than at the closure of the previous session.
At the same time, May futures for WTI fell by 16.3% to 15.28%. During the session, the asset was fixed at around $ 14.47 per barrel.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group