When you think that West Texas Crude Oil Futures (WTI) is bought at ?0.01?, it is already the ultimate bottom bargaining and cannot be lower.

Sorry, -$37.63 appeared.

The reason still comes from oversupply, which opened below $20 per barrel at the end of March. Crude oil market price war, oil storage capacity crisis! ?Mentioned the problem and situation, and after more than half a month, the worst situation appeared. U.S. oil prices crashed to their first-ever low on the 20th, with the May delivery price of West Texas crude oil futures on the New York Mercantile Exchange plummeting $55.9 to close at -$37.63 per barrel. The London North Sea Brent crude oil price for June delivery also fell by US$2.14 to close at US$25.94 per barrel.

The international oil market has been in a very tragic situation under the impact of the epidemic. The price of U.S. crude oil futures fell below $0 for the first time in history. The 18% drop in a single day shows that the oversupply situation in the crude oil market has become It's not just serious.

The epidemic has escalated and has not shown a significant improvement trend in March and April, which has significantly reduced global crude oil demand. Even if the world's major oil-producing countries reach an agreement to reduce production, they will not be able to consume excess inventory in the short term, resulting in International oil prices are under constant pressure.

West Texas crude oil futures expiring on the 22nd plummeted by US$55.9, or 306%, to close at -US$37.63 per barrel. This is the first time a negative value has been seen since the compilation of oil market futures data in 1983. What does this mean? Oil companies must pay more to buyers before they can get the oil back from buyers.

However, another point worth discussing is that WTI futures for May delivery are thinly traded, so the futures price trend this time cannot be used as an accurate indicator of the oil market.

In addition, London Brent crude oil has been switched to June delivery futures. Brent crude oil is a type of offshore crude oil that traders can easily transport to areas with higher demand. Amrita Sen of Energy Aspects said: "Brent crude oil can be put on ships and moved around the world immediately. However, Cushing crude oil inventories in Oklahoma will be full in May." It is obvious that the current connection The supply and demand imbalance of offshore crude oil is not optimistic.

In order to prevent the spread of the epidemic, most countries in the world currently require people to reduce going out. Billions of people are staying at home to prevent the epidemic. Daily oil consumption at home has also dropped sharply. At the end of March, Saudi Arabia and Russia just cut production due to The controversy has triggered a price war. Since the beginning of 2020, the prices of West Texas crude oil (WTI) and Brent offshore crude oil (Brent) have been cut by half.

According to the International Energy Agency (IEA) Oil Market Monthly Report, global daily crude oil demand in April is estimated to be 29 million barrels less than in 2019, with oil demand returning to 1995 levels. The Wall Street Journal pointed out that although the current international Oil prices have plummeted, but many market participants are optimistic that economic activities will get back on track in Q3 after the epidemic gradually subsides. This may lead to a rebound effect of "super contango" in the oil market, and the current Cushing inventory will be fully loaded next month. This also shows that many traders are buying crude oil for storage in order to sell it at a higher price in the futures market after the epidemic cools down.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.