Energy traders fled from the expiring May U.S. oil futures contract in a frenzy on Monday, sending the contract deep into negative territory for the first time in history, as barely any buyers are willing to take delivery of oil barrels because there is no place to put the crude.
FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed stock graph in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration
“But obviously it’s bone crushing for the producers, the rig count is reflective of this and you’re going to see more of that.”DAN RUSSO, CHIEF MARKET STRATEGIST, CHAIKIN ANALYTICS, PHILADELPHIA “Broad-based commodities are telling you that there is no global growth. I look at the ratio of copper to gold because copper is an industrial metal, widely used for different purposes throughout the economy, and gold is a precious metal, widely used as a store of value or a safe-haven asset in times of market uncertainty. If you look at that ratio it’s been in decline since the beginning of 2018.
“Rystad Energy has long-warned about single-digit WTI prices and even the possibility of going negative, and now that we have reached this threshold, the next logical step will be shut-ins and bankruptcies. If these materialize in the next month, then we can begin discussing optimism in June, but right now, given the likely low compliance of OPEC+ cuts by May 1, the optimism is not yet warranted, and we could see a repeat situation next month.”“The collapse started on Friday.
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