When all Indians were sleeping, and the US market was open. West Texas Intermediate (WTI) Crude Oil prices in the Futures market fall below $0. May Futures for the United States Crude Oil fell more than $35 in a day.
In the worst nightmare, no one could ever dream the crude oil prices will take a nosedive. It is the first time in history, and crude oil prices had gone below zero. This negative trend indicates that sellers are paying to buyers. This situation rose because buyers are not ready to make deliveries. They want to avoid storage costs.
Due to worldwide lockdown, crude oil demand has fallen. Ninety percent of the world’s population is under lockdown. There is a restriction on travel.
Sugandha Sachdeva Vice President for Energy, Metals, and Currency Research of Religare Broking said, it is a difficult situation for the crude oil market. Entire investors’ fraternity eyeballs are on the crude oil market.
India’s strategic reserve capacity for storing petroleum is around 35 million barrels. The storage capacity is equivalent to the consumption of 13 to 15 days of use.
Analysts are expecting crude oil prices to remain in lurching conditions. Even after the production cut deal between OPEC and OPEC+ nations, still, demand graph will take much more time than expectations to recover.
On 15th April, Chicago Mercantile Exchange (CME) advised that individual WTI futures might trade at zero or negative prices. It is due to staggering oil market conditions.