All the major US crude futures plunged at an all time record of 300 percent on April 20 and hit the lowest record in prices. The worldwide lockdown had also put a stop to the fuel consumption across the world which has led to discouraging outcomes in the global oil markets. Declined market data on fuel consumption from strong economies like Germany and Japan has also cast a significant amount of doubt as to how the market will regain strength after it resumes the usage of fuel worldwide.
The West Texus Intermediate (WTI) recorded a price sink of 99 percent for all its crude oil followed by scant storage and prices dropping down to $0.15 per barrel. The May, US WTI
contract fell $17.37, or 99%, to $0.15 a barrel at 1.50 PM EDT after touching an all-time low of $2.26. Brent was down $1.76, or 6.3%, to $26.32 a barrel.
“NYMEX crude May contract has slipped below $11/bbl for the first time since March 1999. June contract is down 7 percent near $23/bbl and is still holding above the lows set earlier in the day. The sell-off in near month contract is largely because of position squaring ahead of expiry .There are huge stocks in US storage and this has pressurised near month prices,” said Ravindra Rao, VP- Head of Commodity Research at Kotak Securities.
"There is no bid for May WTI as there is no buyer and we have yet to see a significant reduction is supply at Cushing to offset it," said Scott Shelton, energy specialist at United ICAP.
US Crude stockpiles at Cushing rose 9% in the week to April 17, totaling around 61 million barrels, market analysts said , citing a Monday report from Genscape. "The storage is too full for speculators to buy this contract and the refiners are running at low levels because we haven't lifted stay-at-home orders in most states," said Phil Flynn, an analyst at Price Futures Group in Chicago.
In the domestic market, MCX crude oil delivery for April closed at Rs 965 per barrel down Rs 471, or 32.8 percent. The same for May delivery slipped Rs 259, or 12.86 percent, to Rs 1,755 per barrel.