The cost of oil in the United States has become negative and there is no historical precedent. This means that oil producers are taking care of buyers to make their products fearful, worrying that the capacity limit may be used up in May. People’s interest in oil has almost disappeared because the global blockade has put individuals in trouble. As a result, oil companies have to rely on leasing tankers to store remaining inventory, which limits the cost of U.S. oil to negative numbers.
The price of West Texas Intermediate Crude Oil (WTI) fell to $ 37.63 per barrel, which is the benchmark for US oil. The details of the global oil advertising on Monday contributed to Monday’s sharp decline. Oil is exchanged for its future costs, and the May outlook contract is expected to be terminated on Tuesday. Dealers quickly transfer these properties out to avoid transporting oil and causing storage costs. The cost of WTI also fell in June, but it was still higher than $ 20 per barrel. Then, Brent Crude (a benchmark used in Europe and the rest of the world) was more vulnerable, falling 8.9% to below $ 26 per barrel. The oil industry has been struggling to cope with the decline in demand and disputes between manufacturers due to lower production.
Earlier this month, OPEC and its partners finally reached a record-setting arrangement reducing global yields by about 10%. This arrangement is the largest transaction in oil exploration in history. Nevertheless, some inspectors say that the size of the slices is not enough to produce any effect. Stephen Innes, global market strategist at Axicorp, said: “The market soon realized that the OPEC + arrangement are not enough to adjust the oil market in the current structure.”
He promoted exporters-OPEC and its partners, such as Russia-had just agreed to cut the volume by a record amount. In the United States and elsewhere, the Petroleum Production Organization has decided to use business options to reduce production. However, at the same time, there is rawer oil in the world that cannot be used. Moreover, it is not only about whether we can use it. Equally important is whether we can store it until locking becomes easy enough to generate more interest in petroleum items. The limit is quickly going ashore and drifting. As the process progresses, costs may be further reduced. To truly reverse the market pattern, remedial measures are required, which will depend on how the emergency is alleviated. As private-region manufacturers respond to low costs, they will further reduce inventory, but it is difficult to see that there is sufficient scale to fundamentally affect the market.
Then, people became more and more worried that the storage rooms in the United States would reach its limit. ANZ Bank said that since the beginning of March, the reserves of Cushing, the main oil delivery point in the United States, have almost increased by half. The bank said in the review report: “In the near future, we have the desire to restore health.” Mr. Ennis said: “This is a dump site at all costs, because there is no one, and I mean, no People need to transport oil, and Cushing’s warehouse is constantly filled with oil.