Plunging oil. On the morning of April 20 the price of WTI maturing in May fell below $15 a barrel, reaching a minimum of 8.48% at 14,58 am. Such a low level has not been seen since 1999. The June expiry, which has much more sustained volumes, however drops 5% to 23,6 dollars a barrel. According to reports from Bloomberg, some buyers in Texas have even offered producers two dollars a barrel.
A combination of factors is driving prices down which is putting no small amount of pressure on black gold.
The US agency reports that the storage center in Cushing, Oklahoma, the delivery point for the US West Texas Intermediate contract, would now be close to maximum capacity, so much so that the Energy Department is even considering paying producers not to extract oil. A reality that has led analysts to consider the agreement reached at OPEC+ on the cut in production is insufficient. The group has in fact decided to reduce extraction by 9,7 million barrels per day in order to control the increase in inventories, but the scissors will not be enough to compensate for the sharp drop in demand caused by the blockage of non-essential production established by many states to deal with the coronavirus pandemic. According to estimates, in this phase the demand for black gold would have dropped globally by 25-30 million barrels per day.
The hope of the producers is that when the emergency is over and global restrictions are eased, with the recovery of activities, the demand for oil will also begin to recover. What is certain though is that in the oil market the first quarter of 2020 will be remembered as one of the worst ever. Suffice it to say that at the beginning of January the WTI was trading at 64 dollars a barrel, more than four times today's price. There was also a sharp drop in European Brent which, however, after reaching a low of 22,85 dollars a barrel on 30 March, recovered to 27,3 dollars (-2,7% compared to Friday's close).
In Stock market the collapse of the WTI weighs on the entire oil sector. In Piazza Affari Eni, which will publish its first quarter accounts on 24 April, dropped 2,85%. Saipem (-1,46%), Tenaris (-1,17%). Total is down 1,7%, BP down 0,3%.
