The May futures contract of West Texas Intermediate (WTI) crude fell into uncharted territory on Monday, with sellers willing to pay buyers $37.6 per barrel to take delivery.
The big problem, of course, was lack of storage capacity, so buyers were shying away as well. WTI crude futures are physically-settled contracts, and that is causing such extreme movements.
WTI crude futures contracts, expiring in September, are trading at $30 a barrel. Brent crude prices, on the other hand, are cash-settled, and haven’t fallen sharply this week.
Even so, Brent has declined as much as 60% so far in 2020. What does all this mean for India, which imports a large portion of its oil requirements.