The Price Of WTI Oil Fell Below $5 For The First Time In History
The price of the nearest WTI oil futures fell by 72.96%, up to $4.94 per barrel, which follows from the trading data on The London Ice Exchange.
US oil prices are falling on Monday on fears of further demand cuts and the imminent filling of oil storage tanks. This is the strongest one-day drop in stock trading history. According to analysts, the sell-off in the raw materials market was reinforced by the expiration of the nearest oil contract. The May contract expires on April 21.
Crude stocks at the largest U.S. oil terminal in Cushing, Oklahoma, rose by 5.7 million barrels last week, to 55 million barrels. The maximum volume of oil storage is about 76 million barrels, and at the current replenishment rate, it could be filled by mid-May, Reuters reported.
The International Energy Agency (IEA) estimates that global oil demand will fall by 30% in April amid restrictive measures taken to limit the spread of the coronavirus. Compared to last year, demand will decrease by 29 million barrels per day. This level was last observed in 1995.
The news that OPEC+ members agreed to cut production by 9.7 million barrels per day in May and June did not inspire markets. The coronavirus pandemic and restrictive measures around the world continue to have a negative impact on demand, and given the uncertainty of returning to normal, any sustained price growth is not yet the baseline scenario, the expert believes.