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Oil drops to 21-year low with storage filling as demand shrivels

Bloomberg
Bloomberg 4/20/2020 10:57 AM GMT+08  • 3 min read
Oil drops to 21-year low with storage filling as demand shrivels
Oil extended its slide, falling to the lowest in more than two decades, on concern the world is rapidly  running out of places to store crude after output cuts proved insufficient to cope with plunging demand. 
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(Apr 20): Oil extended its slide, falling to the lowest in more than two decades, on concern the world is rapidly running out of places to store crude after output cuts proved insufficient to cope with plunging demand.

Futures in New York fell 15% to less than US$16 a barrel after losing almost a fifth of their value last week as the deal by OPEC+ and other producers failed to counter the demand hit from a crippled global economy. The current May contract expires Tuesday, however, with the more active June futures falling by around a third as much on more than five times as much trading volume. Global benchmark Brent crude was only down around 1%.

Near-term prices for West Texas Intermediate, the U.S. benchmark, are trading at huge discounts to later-dated contracts on concern the storage hub of Cushing, Oklahoma, will fill to capacity. That has seen prices disconnect from Brent futures in London. Buyers in Texas are offering as little as US$2 a barrel for some oil streams, raising the possibility that American producers may soon have to pay customers to take crude off their hands.

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