Negative! Us may WTI crude oil futures closed at US $37.63 per barrel

category:Finance
 Negative! Us may WTI crude oil futures closed at US $37.63 per barrel


Is it because oil is suddenly worthless? It is understood that a negative oil price means that the cost of transporting oil to refineries or storage has exceeded the value of oil itself.

According to Wall Street, such a crazy sell-off is not due to the deterioration of energy fundamentals. The main reason may be the market mechanism set by the exchange. Said Giovanni staunovo, an analyst at UBS. Most institutional investors have shifted positions and focused on the trading of crude oil futures contracts in June, and the trading volume of crude oil futures contracts in May was diluted. The lack of liquidity and the sudden increase in the volatility of the contract price due to the deadline also gave rise to extreme offers.

Market participants believe that the abnormal decline in oil prices is related to the approach of WTI crude oil may contract delivery date. According to Zhishang, the may contract will be delivered on April 21 (02:30 a.m. Beijing time) local time. Most brokerages will be extended April 16-20. In order to avoid being forced to close positions, some traders tend to cancel the contract in May ahead of time, and rebuild the contract in June next year, resulting in many sales of the contract in May, and the price drops sharply. Generally speaking, the price difference between neighboring months will not be too large, but the difference between WTI may crude oil futures and June crude oil futures once exceeded $60 per barrel.

In addition, according to CCTV finance and economics report, it is not excluded that some crude oil buyers deliberately lowered the price of crude oil futures in May to bargain for crude oil.

In addition, the limited crude oil storage capacity is also an important factor affecting the oil price.

According to data released by the EIA in the middle of the week, as of April 10, US crude oil inventory (excluding strategic oil reserves) increased by 19.248 million barrels compared with the previous week, and the change value of US crude oil inventory recorded an increase for 12 consecutive weeks, a record high. Storage capacity in Cushing, Oklahoma alone, is now 69 per cent, up from 49 per cent four weeks ago, and U.S. storage facilities are rapidly filling up. In this case, crude oil producers can only reduce production volume in the next few months and crude oil prices in recent months, reduce inventory and reduce production costs. Chris Midgley, an analyst at S & P global Platts energy information, also pointed out that Cushing is an inland city and the crude oil storage capacity is likely to be filled in three weeks. Once it is filled, it will be more difficult for WTI crude oil futures contract to carry out physical delivery. Traders were forced to unwind their long positions to avoid buying physical crude without storage. Source: 21 comprehensive from CCTV finance and economics, tiger securities, Zhongxin Jingwei, etc. Extended reading of main crude oil contracts in domestic commodity futures market opening down more than 3% WTI crude oil futures return to positive value of $2.50/barrel in May. Next question is: where will 100 million barrels of oil be transported? Source: responsible editor of 21st century economic report: Wang Xiaowu NF

According to data released by the EIA in the middle of the week, as of April 10, US crude oil inventory (excluding strategic oil reserves) increased by 19.248 million barrels compared with the previous week, and the change value of US crude oil inventory recorded an increase for 12 consecutive weeks, a record high. Storage capacity in Cushing, Oklahoma alone, is now 69 per cent, up from 49 per cent four weeks ago, and U.S. storage facilities are rapidly filling up. In this case, crude oil producers can only reduce production volume in the next few months and crude oil prices in recent months, reduce inventory and reduce production costs.

Chris Midgley, an analyst at S & P global Platts energy information, also pointed out that Cushing is an inland city and the crude oil storage capacity is likely to be filled in three weeks. Once it is filled, it will be more difficult for WTI crude oil futures contract to carry out physical delivery. Traders were forced to unwind their long positions to avoid buying physical crude without storage.