A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson
CAIRO – 20 April 2020: West Texas Intermediate (WTI) futures for delivery in May lost $55.90, or 306 percent, reaching -$37.63 per barrel., WTI is considered the benchmark for U.S. crude prices.
Upon this data, the US crude oil has recorded its deepest decline since 1983.
Moreover, Brent crude future contracts retreated 9.2 percent to $ 25.43 per barrel.
According to announced data, Monday is the last day for May delivery contracts, and buyers do not want to receive oil during that month and as a result US stores and wells are unable to absorb production.
This comes in light of record stocks in light of the closure of most of the world's major economies, and pessimistic expectations for demand for crude in light of record stocks in light of the closure of most of the world's major economies, and pessimistic expectations for demand for crude.
However, US crude contracts for June delivery maintained their prices near $22 per barrel due to the start of production cuts agreed between the "OPEC +" alliance that will enter into force in early May, and the economies will also gradually open, indicating a better situation during the month of June.
The International Energy Agency recently expected oil demand to shrink by 23.1 million barrels per day in the second quarter of this year on an annual basis, and 9.3 million barrels per day during 2020.
It also expected a record contraction of supply in the oil market by 12 million barrels per day in May after the agreement to cut production.
On April 12, the countries of OPEC+ agreed on a historical agreement was agreed between to reduce production by 9.7 million barrels per day as of next May, during a video conference meeting.
However, demand fears remain in light of the effects of "Corona" on the global economy.
The International Monetary Fund (IMF) expected the global economy to contract 3 percent this year.
Oil lost about two-thirds of its value during the first quarter of 2020 in the worst quarterly performance historically.