WTI contracts for June sink to $10 a barrel

JOHANNESBURG – The benchmark price of US crude oil plummeted further yesterday amid concerns about diminishing storage ability in an oversupplied market.

The West Texas Intermediate (WTI) contract for June fell to $10 (R186) a barrel in early trade in London before recovering to $12 a barrel around noon, following the unprecedented sub-zero fall for the first time.

The WTI May contract dropped off the charts after plunging to -$40 a barrel last Monday, meaning that sellers were paying buyers to take oil off their hands as lockdowns to reduce the spread of Covid-19 crushed demand.

Lester Davids, a trading desk analyst at Unum Capital, said the decline in the June contract to about $10 could be attributed to concerns about oversupply and lack of demand, which remained front and centre for market participants.

“In the short term, we can expect volatility and pressure on the oil prices to continue as aforementioned supply and demand factors sway the opinions of traders,” said Davids.

Source: iol.co.za