U.S. oil benchmark crashes below $3 a barrel, on track for lowest close and biggest one-day fall on record

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The soon-to-expire May contract for the U.S. oil benchmark was on track Monday to finish in single digits for the lowest close and biggest one-day plunge on record for a front-month contract, reflecting a growing glut of crude and a lack of storage space.

West Texas Intermediate crude for May delivery US:CLK20 US:CL was down $15.71, or 86%, at $2.66 a barrel. The May contract expires on Tuesday. The one-day drop would be the largest on record going back to 1983, while a finish near its current level would be far below the previous all-time low for a front-month contract at $10.42 a barrel set on March 31, 1986, according to Dow Jones Market Data.

The huge drop in the nearby contract reflects traders scrambling to exit long positions that would require them to take physical delivery of crude amid dwindling storage space. It also reflects a convergence with the physical spot price for oil.

“The collapse...is mostly a reflection of traders rolling contracts to June as no one wants to take delivery because storage capacity is getting close to being reached,” said Edward Moya, senior market analyst at Oanda, in a note.

The June contract US:CLM20 , which is the most actively traded, was down $2.82, or 11.2%, at $22.24 a barrel.

The ever-widening discount for May versus the June contract reflects “all the bearish supply and demand drivers that remain permanently in place,” he said.

“While we are probably setting the stage for a significant bottom in oil, it does not matter for the May futures contract that will be delivered into a nightmarish bearish situation,” said Phil Flynn, market analyst at Price Futures Group, in a note. “Not only has demand ground to a standstill, the impact of oil cuts from OPEC+ also will not start in time for the current delivery.”

The trading action comes after the May contract posted a 19.7% weekly loss on Friday.

WTI contracts for later delivery have traded at much higher prices than the front-month May contracts. The steep upward slope for prices in later months in crude, a condition known as contango, underlines the dearth of storage of crude in recent weeks as the coronavirus wreaks havoc on global demand for oil.

The expiration of the May contract and the fundamental demand problems have combined to put outsize pressures on the energy sector.

https://www.marketwatch.com/story/us-oi ... 2020-04-19

Traders play 'hot potato' with U.S. oil contract as it crashes to $1 a barrel
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(Reuters) - Energy traders bailed out of the expiring May U.S. oil futures contract in a frenzy on Monday, sending the contract to a record of almost $1 a barrel, as few buyers are willing to take delivery of actual physical barrels of oil because there is no place to put the crude
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May U.S. crude futures hit a low of $1.02 and were lately down $16.47 to $1.80 a barrel, a 90% drop.
With demand down 30% worldwide due to the coronavirus pandemic, and the main U.S. storage hub in Cushing, Oklahoma expected to fill up in a matter of weeks, very few want to be stuck with oil barrels that they have to take delivery on at some point during May. Major oil-producing nations have agreed to cut output and global oil companies are trimming production, but those cuts will not come quickly enough to avoid a massive clog.

“The cavalry (OPEC-plus cuts) won’t arrive in time to save this oil market. This may prove to be one of the worst deliveries in history. Nobody wants or is in need of oil right now,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

The difference CLc1-CLc2 between the expiring May U.S. West Texas Intermediate crude contract and the coming June contract widened to a record at nearly $20 a barrel. That yawning gap emerged because owning the May contract when it expires on Tuesday means that buyer is obligated to take those barrels.

As a result, futures traders, who would normally be able to shift from the expiring contract to the next, are finding few buyers for the expiring May contract to take delivery of barrels. As more traders dump the May contract CLc1, it has crashed, lately trading at less than $6 a barrel.

As of 1:43 p.m. ET (1657 GMT), the May contract CLc1 was down to $1.80 a barrel, a 90% drop, but just 131,000 contracts had changed hands. By contrast, the June contract CLc2 was down $2.72, or 11%, to $22.26 a barrel, but had more than 840,000 contracts traded.

https://www.reuters.com/article/us-glob ... ss+News%29

U.S. oil's May contract has just gone negative, plunging 154% and trading at negative $10 a barrel
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U.S. oil's May contract plunged more than 150% on Monday, meaning that you have to pay to get someone to take barrels of oil off your hands. West Texas Intermediate oil trading on the New York Mercantile Exchange plunged 154% to trade at negative $10 a barrel. The May contract expires CL.1, -176.51% CLK20, -176.51% Tuesday. That one-day drop would mark the first time the contract has traded negative in history and would be the largest on record going back to 1983, while a finish near its current level would be far below the previous all-time low for a front-month contract at $10.42 a barrel set on March 31, 1986, according to Dow Jones Market Data. The June contract CLM20, -16.58%, which is the most actively traded, was down $4, or $15.34, at $21.14 a barrel.

https://www.marketwatch.com/story/us-oi ... 2020-04-20

UPDATE Negative $40
U.S. oil's May contract just marked history, plunging about 300% to settle negative $37.63 a barrel

https://www.marketwatch.com/story/us-oi ... 2020-04-20

navid110 wrote: Tue Apr 21, 2020 4:42 am U.S. oil's May contract has just gone negative, plunging 154% and trading at negative $10 a barrel
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Insane. Oil at -40. Lowest ever.

Free fall

Oil be damned!

Last week, the US oil market experienced negative pricings for the first time ever, spanning two full days; a historic moment for the industry, one that will be remembered for the foreseeable future.

Many brokers had taken into account the risks that the COVID-19 would produce, and had taken the appropriate measures, yet few, if any, were prepared for the events of Monday (20.04.2020), when the price of U.S crude oil set for a May delivery fell to an all time low of -$40 per barrel.

This hit was most felt by the West Texas Intermediate (WTI) Crude. Reports state that production exceeded the storage capacity, simple leaving the producer of the crude commodity with no place to store it.

However, since the dreaded Monday, we have seen a rise in stabilization in oil prices, yet it is too soon to conclude anything. Experts say that WTI futures for June may follow the same pattern as the one we say in May. The cause of this is the lock-down of a significant percent of working people, because of which demand for oil will be at an all time low.

Yet, brokers and traders alike are preparing for the next wave of market shock, which some forecasts are predicting to hit energy commodities. We are currently entering a period where the demand of energies will lower because of the approaching summer season. Yet, we must consider the current virus epidemic as the biggest prerequisite of any future energy market volatility.

Source

Dropping!

ChuChu Rocket wrote: Fri Oct 30, 2020 12:49 am Dropping!

Two reasons:

• Crude oil supplies increased by 4.3 million barrels last week
• Libya suddenly increasing its production/export capacity after months of blockade

Down she goes