NEW YORK | AT the end of a new session epic Tuesday on the oil market, barrel american for delivery in may is finally back above zero, but the situation remains painful with divers historical barrels for delivery in June.
In New York, the price of a barrel of WTI for may delivery, which expired Tuesday, fell on Monday for the first time below zero, investors are reduced to pay the buyers to sell their crude at the risk of ending up with barrels of black gold in their back yard.
On Tuesday, after several hesitations, he came back into positive territory to finish 10,01 dollars per barrel.
This rebound does not augur not, however, a real improvement for the coming weeks.
The barrel of WTI for delivery in June, which will become the benchmark from Wednesday, has plunged from 43 % to finish at 11,57 dollars, a never-before-seen since the inception of this contract in 1983. He fell to 6.50 dollars during the session.
In London, a barrel of Brent North sea for delivery in June fell by 24.4 % to close at 19,33 dollars, its largest fall since the start of the Gulf war in 1991.
The oil market is faced with ravage for several weeks by the restrictions put in place around the world to stop the spread of the COVID-19. With transportation severely restricted, and many plants shut down, the energy demand has collapsed.
The refineries have significantly slowed down their pace and stop buying as much crude.
The extractions of black gold has not decreased in the same proportion, the storage capacities are now close to saturation. It is as well as the speculators, finding no one willing to take possession of their barrels, were forced to pay certain players in the market to get rid of it.
“A world of new risks”
“The idea of negative prices for the oil opens the door to a whole world of new risks on the global market”, noted Phil Flynn of Price Futures Group, according to which “a war of the storage has begun.”
The provider of economic data, Natural Gas Intelligence evokes a fill rate of 80 %, according to the analyst, Ipek Ozkardeskaya of Swissquote Bank.
What does “cause a shock to oil producers and to encourage them to act in a more meaningful way to support the price,” said Fiona Cincotta, to Gain Capital.
Saudi Arabia, the leader of the Organization of petroleum exporting countries (OPEC), said Tuesday “closely monitor” the oil markets and be ready to take “any additional measures”, according to the official news agency SPA.
The cartel has also made it known Tuesday that many of its members and other oil producers outside of the organization had talked on a conference call of the “dramatic situation” on the crude oil market.
During this “informal” meeting, the participants “reiterated their commitment to adjust the oil production,” according to the terms of the agreement sealed on April 12, aimed at reducing the supply of 9.7 million barrels per day from the month of may.
Russia, a key partner of the OPEC in the implementation of this agreement, however, did not participate in the conference call, indicated to the AFP a spokesperson for the minister of Energy Alexander Novak. The presence of saudi Arabia, the world’s leading exporter, has not been confirmed either.
The us president, Donald Trump has announced that it has asked the administration to develop a plan for emergency aid to the industry of gas and oil, hit by the steep drop in prices of black gold.
“We never let fall our great american component of the oil and gas,” promised the tenant of the White House in a tweet.