WTI Oil crashes 99% to 1 cent per barrel

Must Read

We did not discuss Exxon; Guyana President says of meetings with Secretary Pompeo

During his meeting with U.S. Secretary of State, Michael R. Pompeo, Guyana’s President, Dr. Mohamed Irfaan Ali, said that...

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana,...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

U.S. oil prices plummeted in historic fashion Monday, hitting their lowest level on record as traders unloaded positions ahead of the May contract’s Tuesday expiration, Yahoo Finance said in a report on Monday.

West Texas Intermediate crude oil futures for May delivery cratered by as much as 99 percent to 1 cent a barrel. The selling had WTI on track to close at its lowest level since record-keeping began in March 1983, according to Dow Jones Market Data. The June contract was trading lower by 12.15 percent at $21.99 a barrel.

Guyana’s Liza Crude is marketed against Brent which is currently trading at $26.44 per barrel.

According to Yahoo Finance, the May contract is a “horror show” and “heading into the worst delivery situation in history,” Phil Flynn, senior market analyst at Price Group Futures, told FOX Business. “With demand still dead and OPEC+ cuts not hitting fast enough, the market looks like it has no bottom.”

Demand for crude oil is projected to fall by 29 million barrels per day this month, according to the International Energy Administration, as COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease. Lower economic activity means weaker demand for crude oil and its byproducts, including gasoline and jet fuel.

The sharp drop in demand has storage tanks in Cushing, Oklahoma, a key U.S. oil hub, filling up at an astounding rate. Inventories have ballooned by 48 percent to about 55 million barrels, according to a recent report from the Energy Information Administration. Capacity at the hub is about 76 million barrels, according to the EIA.

Oil supplies were swelling even before Saudi Arabia launched a price war against Russia on March 8 after the latter refused to join OPEC in slashing production, causing oil prices to post their largest single-day drop on record.

After more than a month of pumping out oil at elevated production levels, the world’s largest producers agreed on April 12 to historic cuts that will reduce output by 20 million barrels per day beginning May 1.

However, the production deal still won’t be able to offset the big drop in demand.

“To prevent inventories reaching capacity limits, lower prices are needed to trigger further production shut-ins in North and South America,” wrote the chief investment office of the global wealth management arm of Zurich-based investment bank UBS.

WTI has lost 82 percent of its value this year. (Yahoo Finance)

- Advertisement -

Latest News

We did not discuss Exxon; Guyana President says of meetings with Secretary Pompeo

During his meeting with U.S. Secretary of State, Michael R. Pompeo, Guyana’s President, Dr. Mohamed Irfaan Ali, said that...

2020 expected to be a ‘one and done’ recession as oil demand bounces back – API

The enormous challenges triggered by the COVID-19 pandemic this year have caused major disruptions to the global oil and gas industry resulting...

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana, the high quality oil discovered...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during which the two leaders discussed...

Department of Energy remains operational, actively involved in Payara negotiations – Vickram Bharrat

Guyana’s Minister of Natural Resources, Vickram Bharrat, told Members of Parliament on Tuesday that the Department of Energy (DE) remains operational and...

More Articles Like This