International oil prices are falling again. The June delivery of West Texas Intermediate (WTI) in the U.S. continued to fall sharply after falling 25 percent the previous day.
WTI fell 16.7 percent to $10.64 during the day. Earlier the previous day, the WTI fell $4.16 or 24.6 percent to close at $12.78 per barrel.
International oil prices are showing extreme instability amid concerns that they may be entering negative territory again. Earlier in May, the delivery of WTI fell to -40 dollars per barrel during the day. In other words, there could be a situation in which the government has to add money while rolling up crude oil.
What concerns the market is the global “tank top” situation. As a result of the sharp drop in demand for crude oil due to the new coronavirus infection (CORONA 19), crude oil is currently oversupplied. Although the market has been storing excess crude oil in stores, there is a growing concern that even this will face limitations. Tank tops mean that as crude oil inventories increase, storage will no longer be able to fill crude oil.
Moreover, the oil market is fluctuating as the U.S. Oil Fund, the world’s largest oil-listed index fund, has decided to sell all of its near-term June products over four days.
Sources : https://www.ft.com/content/f878ae96-0b20-49fb-a997-30cb13b4bb77