But don't get me wrong. This is only the futures price, not the spot price. Negative numbers don't mean that everyone will pay the bill for free in the future.
Although the oil price fell in May, the transaction price in June was still higher than $20. The global benchmark Brent crude oil price is still above $25.
Last Friday, the price of crude oil closed at $65,438+$08.27 per barrel, down more than 300% from today's low. The market reaction shows that the recent production reduction agreement between the Organization of Petroleum Exporting Countries (OPEC) and the crude oil organization Russia is not enough to cope with the sharp decline in global diffusion demand that is prevalent in COVID-19. At the same time, the sharp increase in US inventories hit a record high, and the problem of exhaustion of oil storage facilities in summer further made the market lose confidence in the crude oil share price in recent months. In addition, the delivery date of crude oil futures is approaching in May, and the futures contract is signed.
According to the data of the US Department of Energy, the oil storage capacity of the oil storage tank in Cushing, Kras, Russia alone has reached 69%, which is higher than the highest around 49%, and the oil storage facilities in the United States are rapidly filling up. In this case, crude oil producers can only reduce the price of crude oil in the past month and reduce their inventories and production costs by cutting oil production in the next few months.