WTI May crude oil futures experienced a waterfall-like plunge on April 20, which fell below US $ 11 / barrel that night, and fell by more than 42% during the day. As of press time, it was reported at US $ 10.58 / barrel, and fell by more than 8% on the June contract day. The spread between U.S. oil futures and Brent crude oil and other crude oil benchmark prices is expanding.
WTI refers to West Texas Intermediate Lightweight Low Sulfur Crude Oil, which is physically delivered in Cushing, Oklahoma, and traded on the New York Mercantile Exchange, WTI crude oil futures play the role of the US benchmark crude oil contract. The exhaustion of crude oil reserves in the Cushing region is one of the key factors driving down oil prices. In addition, the May contract will be settled on April 21 (Beijing time 22:30 am). In order to avoid being forced to close positions, some traders often close the May contract in advance and re-open the position under June. The contract caused a lot of selling in the May contract and prices fell sharply. Under normal circumstances, the difference between the two futures contracts that are about to change months will not be too large. But this time, the difference between the WTI May contract and the June contract has exceeded $ 10, which is very rare.
On the same day, the spot price of selected crude oil (WCS) in Western Canada fell below zero dollars per barrel and traded at negative oil prices. Jason Kenney, Governor of Alberta, one of Canada ’s major oil-producing provinces, tweeted that “the future of thousands of Canadian jobs is in danger”, “this is not just It ’s Alberta ’s problem. For decades, the energy industry has created a lot of jobs for Canadian provinces. ”He called on the federal government to do more to save the industry, calling oil and gas the largest sub-sector of the Canadian economy. It is also Canada’s largest export industry.
Negative oil prices mean that the cost of transporting oil to a refinery or storage has exceeded the value of the oil itself. Yan Jiantao, deputy general manager and chief strategy officer of Longzhong Information and author of “Illustrated Crude Oil Futures”, analyzed the surging news that the most important factor affecting oil prices at this moment is not production cost, but inventory in some cases. Especially in inland oil-producing areas, the epidemic has caused problems such as poor infrastructure and transportation and logistics, and crude oil is difficult to export or store. “Shut down and shut down for purely economic reasons are risky. So, to continue production, if the storage capacity of the storage tank is insufficient or the storage cost is too high, the producer would rather accept the negative oil price and have to lose money to let the buyer pull away.”
Yan Jiantao said that in fact, since the end of March, there have been negative oil prices in the United States and Canada. Historically, negative gas prices are more common, negative oil prices are rare, and only recentlyOnce. Uncertainty in the epidemic, uncertain recovery of the economy and demand, and excess inventory may have led to frequent negative oil prices.
The first U.S. crude oil with a bid below zero is an inland small crude oil stream known as Wyoming asphaltic acid, with a negative price per barrel last month 19 cents; in Texas, the birthplace of the shale oil revolution, prices are moving in this direction, with local crude oil prices at only $ 2 per barrel.
On April 8, the world ’s largest futures and options exchange, the Chicago Mercantile Exchange (CME), said it was reprogramming software to handle energy-related financial instruments. Negative price.