NY Mercantile - Crude Oil May 20 Delivery: -23.14 USD at close.
A drop of -41.41 from yesterday
Low for the day was -40.32 USD per barrel.
Sure would be great if someone (or entity) had a billion barrels of salt dome oil storage in Texas and Louisiana. They could make a killing and get free oil to boot.[AutoBlog] Buyers aren't willing to take delivery of oil; there is no place to put it
Traders fled from the expiring May U.S. oil futures contract in a frenzy on Monday, sending the contract into negative territory for the first time in history, as barely any buyers are willing to take delivery of oil barrels because there is no place to put the crude.
May U.S. crude futures plunged to a depth never before seen, settling on the day at minus $37.63 a barrel, a decline of some 305%, or $55.90 a barrel. Prices set a low of negative $40.32.
With demand down 30% worldwide due to the coronavirus pandemic, and the main U.S. storage hub in Cushing, Oklahoma, expected to fill up in a matter of weeks, very few want to be stuck with oil barrels that they have to take delivery on at some point during May.
"The people who are long are desperate to get out," said Phil Verleger, a veteran oil economist and independent consultant. "If you don’t have storage, you have to get out."
Major oil-producing nations have agreed to cut output, and global oil companies are trimming production, but those cuts will not come quickly enough to avoid a massive clog.
The difference between the expiring May U.S. West Texas Intermediate crude contract and the coming June contract widened to a record at more than $60 a barrel and settled at $51.90. That yawning gap emerged because owning the May contract when it expires on Tuesday means that buyer is obligated to take those barrels, which few want to do.
"For many investors or people using these contracts for hedging this is really a big pain," said Edward Moya, market analyst at OANDA in New York. "There's no place to put it — we're running out of space to store oil."
The June contract ended down 16% to $20.43 a barrel.
When a futures contract expires, traders must decide whether to take delivery or roll their positions into an upcoming contract. Usually this process is relatively uncomplicated, but the May contract's decline reflects worries that too much supply could hit the markets, with shipments out of OPEC nations like Saudi Arabia booked in March set to cause a glut.