And again, before our eyes, interesting precedents are being created and textbooks on economics are being rewritten! For the first time in history, the oil price has fallen to a negative level. We are talking about May futures for WTI crude oil. By the end of yesterday’s trading session, the asset had fallen by 300% on NYMEX. Thus, the oil price has demonstrated the value of minus 37.63 US dollars per barrel.
Even the most pessimistic analysts could not predict such a development of events. A sharp drop in energy demand caused by general quarantine was the reason for such a fall. The market is overcrowded, the storage is full. Manufacturers are forced to pay a lot of money to customers to get rid of oil excess.
Since analysts started observing WTI in 1983, yesterday’s decline has become the maximum.
The June futures for WTI have declined in value too; the decrease has totaled 18.3%. The asset closed the trading session at a value of $ 20.03 per barrel.
It is possible that manufacturers will not be able to free up the storage quickly enough, so the June futures could suffer the same fate as May ones.
June contracts for Brent crude oil have shown a rather strong decline too. During the trading session, the asset fell by 8.08% to close at $ 25.81 per barrel.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group