NEW YORK | After another epic session on Tuesday in the oil market, the US barrel for delivery in May finally rose above zero, but the situation remains painful with the historic dips in barrels for delivery in June.
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In New York, the price of a barrel of WTI for delivery in May, which expired on Tuesday, fell below zero for the first time on Monday, as investors were reduced to paying buyers to sell their crude at the risk of ending up with black gold barrels in their backyard.
Tuesday, after several hesitations, it returned to positive territory to end at 10.01 dollars a barrel.
This rebound does not bode well for a real improvement in the weeks to come, however.
The barrel of WTI for delivery in June, which will become the benchmark from Wednesday, plunged 43% to finish at 11.57 dollars, unheard of since the creation of this contract in 1983. It fell to $ 6.50 during the session.
In London, a barrel of Brent from the North Sea for June delivery collapsed 24.4% to close at $ 19.33, its biggest drop since the start of the Gulf War in 1991.
The oil market has been facing ravage for several weeks by restrictions put in place around the world to stem the spread of COVID-19. With severely limited transport and many factories shut down, demand for energy has collapsed.
Refineries have significantly slowed their pace and no longer buy as much crude.
As black gold extractions have not declined in the same proportions, storage capacities are now close to saturation. This is how speculators, finding no one willing to take possession of their barrels, had to pay certain market players to get rid of them.
“A world of new risks”
“The idea of negative oil prices opens the door to a whole world of new risks in the global market,” remarks Phil Flynn of Price Futures Group, according to whom “a storage war has started”.
Economic data provider Natural Gas Intelligence reports an 80% fill rate, according to analyst Ipek Ozkardeskaya of Swissquote Bank.
What “cause an electric shock to oil producers and encourage them to act more significantly to support prices,” said Fiona Cincotta, Gain Capital.
Saudi Arabia, leader of the Organization of the Petroleum Exporting Countries (OPEC), said Tuesday to “closely monitor” the oil markets and be ready to take “any further action”, according to the official news agency. SPA.
The cartel also said on Tuesday that several of its members and other oil producers outside the organization spoke on a conference call about the “dire situation” in the crude market.
During this “informal” meeting, the participants “reiterated their commitment to adjust oil production” under the terms of the agreement sealed on April 12 aimed at reducing supply by 9.7 million barrels per day from May.
Russia, OPEC’s main partner in the implementation of the agreement, did not take part in the conference call, however, a spokeswoman for Energy Minister Alexander Novak told AFP. The presence of Saudi Arabia, the world’s largest exporter, has not been confirmed either.
US President Donald Trump, for his part, announced that he had asked his administration to set up an emergency aid plan for the gas and oil industry, which had been hit hard by the vertiginous drop in gas prices. black gold.
“We will never let down our great American oil and gas industry,” promised the tenant of the White House in a tweet.
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