Historical Collapse, "Negative Oil Prices" Come! The Reason Behind It Is "Nowhere To Put".

Affected by the serious oversupply of the US oil market, the imminent expiry of the contract, and the decision of Texas to decide whether to cut down production and other factors, New York oil prices opened lower in early trading on the 20 day, and continued to go down in the intraday market, which accelerated the decline in late trading. At the close, it fell to a negative value of 300%.

-37.63 dollars! New York crude oil futures fell for the first time for the first time

On the 20 day, the New York Mercantile Exchange, which was due to expire on the 21 th, delivered a light crude oil futures price in May. By the end of the day, The New York Mercantile Exchange's May light crude oil futures price fell 55.90 U.S. dollars to close at -37.63 dollars per barrel, or 305.97%. 。 Brent crude oil futures for June delivery fell 2.51 US dollars to close at $25.57 a barrel, or 8.94%.

Analysts pointed out that in the long run, the imbalance between global oil supply and demand is beginning to be reflected in prices. Oil reserves are increasingly being filled, resulting in a fall in oil prices. In the short term, futures contracts will soon expire in May, and investors will shift their positions to the June contracts, which will also lead to a downward pressure on futures prices in May. The New York Mercantile Exchange's June light crude oil futures closed yesterday at $20.43 a barrel.

However, at present, OPEC's OPEC agreements with a number of non OPEC oil producers have not been able to solve the problem of supply and demand imbalance. Oil prices need to go further down to force more oil and gas companies to cut production or stop production, so that the market can restore supply and demand balance.

Behind the "negative oil price": demand avalanche, nowhere to put

Some analysts believe that the impact of the epidemic, global demand for crude oil declined, and traders worried about the crude oil storage problems, these factors are the main reason for the collapse of crude oil futures prices.

The "West Texas Intermediate crude" traded on the New York mercantile exchange needs to be delivered at Cushing, Oklahoma, the largest oil storage base in the United States, but Cushing's storage space is being quickly filled. According to market estimates, Cushing's current storage capacity has reached 69%, a month ago, this figure is only about 50%. Market analysts predict that Cushing's storage space will run out in May. The 21 day of local time is the delivery date of New York crude oil futures contract in May. Traders are worried that spot crude oil has no place to store and sell the May contract to avoid spot delivery, resulting in price collapse. The London Brent crude oil futures price fell by only about 8%, because the Brent crude oil did not restrict the delivery place, and it could be easily transported through tanker storage.

Resta, senior vice president and head of oil market at Bjornal Tonge energy, said that the problem of global oil supply and demand imbalance began to be revealed through price. As crude oil production continues to be relatively unaffected, oil reserves are increasingly being filled. 。 There is no precise estimate of how much crude oil the world can store. Analysts at Prof energy information are estimated to be 1 billion 400 million barrels. By the end of April, 90% of the storage space will be occupied. No land storage of crude oil is likely to be a major problem to be faced.

Deeper reason is that inventories are growing while oil demand is shrinking. The International Energy Agency released a report on 15, predicting that global crude demand fell to 29 million barrels a day in April, the lowest level since 1995. The report said that global demand for crude oil will drop sharply in May and June. The oil exporting countries (OPEC) and several non OPEC oil producing countries recently achieved a slow implementation of the oil production agreement, the implementation level of risk and some oil producing countries failed to make a clear commitment to reduce production, these factors continue to pressure the market.

Most market analysts also believe that the recent cut in production agreements will not help alleviate the oversupply of crude oil in April. Oil prices need to go further down to force more oil and gas companies to cut production or stop production, so that the market can restore supply and demand balance. 。

Why is the price of New York crude oil falling to a negative value this time? CCTV reporter Xu Dezhi conducted an analysis.

The reasons for the collapse of oil prices are:

1, the global spread of the new crown pneumonia epidemic has caused a sharp decline in crude demand. The crude oil OPEC and Russia have not reached enough agreement to deal with it, so the oil price is at a historical low.

2, from the point of view of the US, the surge in US stocks hit a record high. This summer, we will face the test of the depletion of oil storage facilities and the "no land for oil". According to the US Department of energy, storage capacity in Cushing, Oklahoma, now stands at 69%, up 49% from four weeks ago, and US oil storage facilities are quickly filled. Under such circumstances, crude producers can only reduce their inventories and reduce production costs by reducing oil production in the coming months and reducing the price of crude oil in the near future.

3, finally, in May, the US crude oil futures price delivery date was April 21st. When the futures contracts were shifted for the month, the price usually appeared empty jump.

The three reason has made us crude oil price fall for the first time, that is to say, the cost of transporting oil to refineries or storage has exceeded the value of oil itself.

How will the oil price go next?

1, a global commodity strategist with capital companies told the US financial media CNBC that the oil market is still in an excess state. At present, the oil market is not relieved in the short term, so it is more worried about the recent oil prospect.

2, Bloomberg quoted analysts as saying that at present, people's mentality is generally bearish. Investors are worried that it is difficult to solve a lot of inventory in the short term, so there is a sell-off in the market. Everyone wants to deal with the crude oil but can not find buyers.

3, however, some analysts believe that futures contracts are linked to specific delivery dates. Due to the global spread of the new crown pneumonia epidemic, there was no demand for oil futures contracts in May, so manufacturers are willing to spend money on these excess crude oil. But after April 21st, the futures price in June will return to more than 20 US dollars / barrel. In the coming months, oil prices will return to normal in the long run after the existing crude oil is cleared.

Lv Jianzhong, vice president of China Petroleum Economics and Technology Research Institute, The impact of the new pneumonia outbreak is different from that of the previous several oil prices. The first few oil prices have fallen but demand is growing. A careful analysis of the decline in oil prices in 2008 and 2014 to 2016 shows that demand side is growing. It is because of the financial crisis or oil prices being squeezed out of the oil price. At the same time, the demand side and the demand side are weak, and the demand side is in serious crisis. Then the supply side will play a game of irrational game. In the end, the price of oil dropped sharply, and we could not find the market. When we could find the market, the oil price was 100 US dollars and 30 dollars per barrel, its sales did not change much, and the market did not shrink.

This time, because the demand side has shrunk seriously, the price of oil has dropped and risen. It is actually not very sensitive to the reaction of oil prices. There is no correlation between them. Now you have a basic oil price drop to 8 dollars, and it will not expand consumption. Now that oil price is up to $50, it may still be such a big consumption, because demand is relatively rigid and rigid. This reduction plan is not enough to support the shrinking demand side.

Han Xiaoping, chief information officer of China energy network, This time of the oil price collapse, it is precisely that the number of deaths in the United States has exceeded 40 thousand, and the number of infected persons has exceeded 750 thousand. If this matter is further expanded, it is possible that the production demand of the whole US is at a state of rest. If the impact of the epidemic on the whole economy and society will weaken, the demand may increase, even if demand grows. As far as current oil prices are concerned, I am afraid that oil prices will hardly exceed $40. 。