America's WTI Oil Price below Zero for the First Time in History

The price of May futures (supply agreements) for WTI North American oil fell below $ 0 per barrel, reaching $ 37.6 per barrel. This meant that sellers were willing to pay to have their goods taken away. By the close of trading in May, the North American market absolutely did not need new oil due to overcrowding of storage facilities. However, a fall in the price of a financial instrument does not mean that physical oil will in fact be given for a surcharge or for free. Before the close of trading on the market, there were holders of contracts for the supply of oil who did not find buyers for it. Due to the lack of demand, prices for it went into free fall. By 9 pm Moscow time, May futures fell to one cent, then the decline continued below zero. The collapse was preceded by reports that the oil storage in Oklahoma could be full by mid-May, Forbes writes. At the same time, June futures are also cheaper, but remained at a price of around $ 20 per barrel. Bidding for the May deliveries has ended; they will not continue longer. The collapse of their prices and the fullness of storage in the United States does not have a significant impact on the supply of other oil, but the Brent brands and the Russian Urals are also becoming cheaper. The main reason is a catastrophic decline in oil consumption due to coronavirus. According to the forecast of the International Energy Agency, in April oil consumption will be the lowest in 25 years, and will decrease by one third within a year. Oil prices since the beginning of the year decreased by 55-65 percent depending on the brand. Prices for Russian oil, in turn, have a serious impact on the budget. According to Finance Minister Anton Siluanov, at current oil prices, the reserves of the Reserve Fund will last until 2024. Earlier, the Ministry of Finance expected that there would be enough money for six to ten years, RBC recalls.