US, WASHINGTON (ORDO NEWS) — Wall Street analyst Tod Wood admits a deterioration in the global oil market, and the situation in the US could lead manufacturers to pay extra for their own oil.
According to him, such major oil producers as Russia, the USA and Saudi Arabia are striving to take their place in the market. At the same time, the current situation in the oil market with the drop in futures to negative values is largely due to the coronavirus.
The expert is confident that in the near future we should expect a decrease in the price of Brent crude oil. Wood noted that all of the oil produced filled storage facilities – primarily in the United States. So it comes to the fact that soon companies will have to pay extra for the oil they produce.
The price of North American WTI crude oil for May delivery fell to negative values. The price of May futures for WTI crude oil by the end of trading on the New York Mercantile Exchange (NYMEX) on Monday, April 20, fell by almost 300%, dropping to minus $ 37.63 per barrel. Quotations fell to negative values for the first time in history.
The May WTI contract expires on Tuesday. The June contract for WTI fell by $ 4.6 (18.3%) on Monday, to $ 20.03 per barrel.
A sharp drop in oil demand in the context of the coronavirus pandemic has led to the fact that the market is flooded with oil, and tank capacity to store it is not enough.
Earlier in the day, WTI crude oil collapsed. First, the price of oil of this brand reached the level of April 1, 1986 – $ 10 per barrel, and then for the first time in history fell below $ 8 and continued to fall. As a result, the price of WTI oil fell to $ 0, and after that it became negative .
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