US Oil Price Below $1 A Barrel As Storage Capacity Runs Out - Business - Nairaland
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| US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Positivepoint(m): 8:01pm On Apr 20, 2020 |
Benchmark US oil prices headed to negative territory after crashing to one cent a barrel as the collapse in demand caused by the coronavirus pandemic leaves the world awash with oil and not enough storage capacity — meaning producers may soon be paying for buyers to take it off their hands. West Texas Intermediate, the US marker, lost 99 per cent on Monday, with the price of oil for delivery next month sinking to record lows on warnings that traders were struggling to access storage capacity at the refinery hub of Cushing, Oklahoma, which is expected to be full within weeks. CME Group, the operator of the exchange where WTI trades, took the extraordinary measure of saying prices could even turn negative for the current contract, which expires tomorrow. That means producers would be paying buyers to take their oil in order to delay the shutdown of their fields. The price crash is the latest indication of the depth of the crisis hitting the oil sector. Lockdowns imposed in many of the world’s major economies have sent crude demand tumbling by as much as a third, leaving the industry facing what Jefferies analyst Jason Gammel called “the bleakest oil macro outlook” he had ever seen. The collapse will be a blow to US president Donald Trump, who has gone to extreme lengths to protect the US oil industry, including backing moves by Opec and Russia to cut production. Physical grades in many North American regions have fallen into the low single digits reflecting a dearth of buyers able to take delivery of oil, even as prices for later contracts have held up marginally better due to some investors betting on an eventual rebound. In Canada, spot prices for Alberta’s heavy oil, which sells at a deep discount to WTI, traded at below minus $6 a barrel in the spot market, according to traders and brokers. The possibility of negative prices for the main US oil grades is growing. Stephen Schork, editor of oil-market newsletter The Schork Report, said he expected access to storage capacity in the US to be exhausted within two weeks — and cautioned that the collapse of the country’s oil consumption was accelerating. “It just gets uglier from here,” Mr Schork said, adding that sharply rising unemployment numbers meant fewer and fewer Americans would be driving, hurting petrol demand even during its peak summer months. “This summer is dead on arrival. The biggest demand months are not going to happen,” he said. Part of the rapid decline in WTI prices reflects technicalities around the contract for oil to be delivered in May, which expires on Tuesday while short-term storage issues are severe. Still, WTI for June delivery was also down 10 per cent at $22.62, while Brent crude, the international marker, dropped 5 per cent to $26.72. Both benchmarks traded above $65 a barrel as recently as January. Dealers speculated that traders who had successfully leased storage were putting pressure on rivals without access to tank farms. That could allow them to snap up ultra-cheap oil for their storage tanks, before locking in much higher prices in the futures market, essentially buying oil for less than $2 and then selling a month later for more than $20. Traders said contracts for later delivery were being propped up by hopes the worst of the demand destruction could be passed by the summer, if lockdowns and travel bans are eased. But others are questioning whether the record-breaking gaps between cash trades and contracts for later delivery are sustainable. “The May contract expires tomorrow so volume on it is going to be very light,” said Olivier Jakob at Petromatrix. “That being said, oil is very weak . . . The big thing right now is destruction of demand due to the virus.” Wall Street opened lower, dragged down by weakness in energy stocks. The S&P 500 was down 0.5 per cent in New York. The sub index for energy was off 4.5 per cent. European indices steadied, with the continent-wide Stoxx 600 closing 0.7 per cent higher, while London’s FTSE 100 and Frankfurt’s Dax gained 0.45 per cent. Crude prices have plummeted this year on the possibility that the coronavirus outbreak will cause a deep global recession. The number of Covid-19 infections worldwide topped 2.4m as of Monday, according to Johns Hopkins data, with more than 165,000 dead. The latest developments “painted a grim picture of a world still firmly in the grip of the coronavirus crisis, amplifying worries about sinking oil demand”, said Vandana Hari, founder of Vanda Insights, a Singapore-based energy research firm. The deepening fall in oil prices has come despite an Opec-backed deal to cut roughly 10 per cent of global crude supply. Reductions of varying magnitude are planned to run until April 2022 as part of efforts to stabilise prices. https://www.google.com/amp/s/amp.ft.com/content/a5292644-958d-4065-92e8-ace55d766654 |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by philiancoop(m): 8:04pm On Apr 20, 2020 |
And Nigeria no get light 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by RealSolution001: 8:24pm On Apr 20, 2020 |
E don be |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by helinues: 8:48pm On Apr 20, 2020 |
$1.. O set go |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by sarrki(m): 8:49pm On Apr 20, 2020 |
We need to sit tight as a nation Our past and present leaders failed woefully No where to fall back now Agriculture and taxes it’s the way out now |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Racoon(m): 8:49pm On Apr 20, 2020 |
 Nigeria have entered once chance. |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by sapientia(m): 8:51pm On Apr 20, 2020 |
The major blow back will be massive in Africa 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by xynerise: 8:51pm On Apr 20, 2020 |
Crazy days ahead... Nigerian oil marketers, we are waiting for N20 per litre with abeg to buy |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Bevista: 8:51pm On Apr 20, 2020 |
Welcome to the New World Economic Order and the world of A.I. --- The global imperialist have used the CV pandemic to distract everyone from the fact that they are in the process of collapsing the existing world economic order and setting up a new one. --- Those of you who are screaming lockdown & social distancing, just prepare for the Dystopian & Orwellian State that is about to be foisted on you. -- Fasten your seat belts folks, it's gonna be a really rough & bumpy ride. The global oil-driven economy is over! 4 Likes |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by sapientia(m): 8:52pm On Apr 20, 2020 |
This is more scary than covid 19. Can Africa survive? And Buhari is even the presidential face of Nigeria. We are not certain if the next president the cabal will appoint as Chief of Staff will know what to do. Seems after this covid 19 might be worse than during for Africa. Now is the time Buhari should tell us how much was spent looking for oil in lake Chad. 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by nairaobserver2: 8:52pm On Apr 20, 2020 |
Hmmm |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Asabe4(f): 8:53pm On Apr 20, 2020 |
This is scary  Can't even begin to imagine the hardship that will follow. God have mercy! |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Nobody: 8:53pm On Apr 20, 2020 |
sarrki:Taxes from where again sarrki? Or are u among those who assume Nigerians don't pay tax? 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by NwaNimo1(m): 8:54pm On Apr 20, 2020 |
Free fuel......if not for lockdown i'd be like! [img]https://media./images/1cee1cc72d5c6afbd0cd1d68a5be3d0f/tenor.gif[/img] |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by cystem(m): 8:55pm On Apr 20, 2020 |
This is really bad..... We might just be doomed in Nigeria �� |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Taeewo(m): 8:58pm On Apr 20, 2020 |
Which way naija? |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Emmanuelhector(m): 9:01pm On Apr 20, 2020 |
good news |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Kamani8: 9:04pm On Apr 20, 2020 |
| We will not take it We're the giant of Africa  |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Ayo8(m): 9:05pm On Apr 20, 2020 |
This COULD be the sequence of events if no improvement in oil price say in 6months... FG Deplete external reserve FG can't pay salaries No allocation to state govt State govt cant pay salaries Nation grinds to a halt Severe hunger in the land Revolution. 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Kamani8: 9:05pm On Apr 20, 2020 |
Ayo8:  Time to start hawking our oil on lagos traffic before hunger kill person Covid 19 giving nigeria lectures back to back 1 Like |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by DanDeeBoss(m): 9:08pm On Apr 20, 2020 |
This is getting messier....... Where's my tractor at?? |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by LagosWahala: 9:10pm On Apr 20, 2020 |
Haha...Naija egungun haff enter express oooo |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by JSMMUYIWA(m): 9:20pm On Apr 20, 2020 |
Nigeria which way!  This is really disturbing news! |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Cargoed: 9:31pm On Apr 20, 2020 |
Anyone with a Tank farm can contact me let's make some money. You get paid to store Oil. |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by BennyDGreat: 9:34pm On Apr 20, 2020 |
Ayo8: Hmmm I pray it doesn't get to this mehn.... |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by MadeInTokyo: 9:50pm On Apr 20, 2020 |
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| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by MadeInTokyo: 9:50pm On Apr 20, 2020 |
Sjdifi
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| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Nobody: 9:53pm On Apr 20, 2020 |
Everybody is about to answer him papa name.
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| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by StrikeBack(m): 9:55pm On Apr 20, 2020 |
Could be a blessing in disguise for us here. Atleast we would have uninterrupted steady electricity with free access to oil by the time shit gets to our useless Brent I pity dangote sha Y'all will buy 1 bag of cement and get I litre of oil as promo |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Nobody: 9:56pm On Apr 20, 2020 |
Ha, I wasn't expecting this. |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by 4ckz: 9:58pm On Apr 20, 2020 |
OP just has a very long way of saying the word "Nigeria is bleeped". |
| Re: US Oil Price Below $1 A Barrel As Storage Capacity Runs Out by Nobody: 10:01pm On Apr 20, 2020 |
Bevista: People, what if what this man is saying here is true? |
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