WTI futures may contract closed negative for the first time in history

category:Finance
 WTI futures may contract closed negative for the first time in history


(WTI contracts in May and June show amazing price difference, source: tradingview)

It is worth mentioning that in theory, the last trading day of the may contract is Tuesday local time (many brokers have entered the settlement process), so the traders who still hold the contract will enter the physical delivery stage in theory. Therefore, in the case of limited storage space, the sluggish trading volume (only 1 / 7 of the main contract) matched with the state of almost zero incremental demand, resulting in todays record slump.

Today, except for WTI crude oil futures, almost all physical crude oil delivery prices in the United States, regardless of location and variety, enter the negative region.

(physical crude oil delivery price, source: forexlive, Bloomberg)

The problem for traders is that the current main contract in June will expire on May 19. If the crude oil market does not improve at that time, the traders who hold the contract will again face the dilemma of high cost transfer and physical delivery.

(at present, the follow-up contract is still in the normal forward rising state, source: CME)

Helima Croft, global chief commodity strategy analyst at RBCC capital, said that at present, there are many crude oil that refineries dont need at all at sea. We dont see any favorable factors for the recovery of crude oil market in the short term. We still have a pessimistic view on the subsequent crude oil contracts.

Source: Financial Association editor in charge: Zhong Qiming, nf5619