By Canadian Press

Negative Prices

Negative oil price plunge a short term anomaly: analyst

Apr 20, 2020 | 2:44 PM

CALGARY – A Calgary energy analyst says the plunge by benchmark U.S. crude oil prices into negative territory for the first time on Monday is a short-term anomaly that likely won’t have a lasting effect on Canadian producers.

Matt Murphy of Tudor Pickering Holt & Co. says the drop in West Texas Intermediate near-month contract prices below negative US$37 per barrel is due to unique circumstances.

Prices collapsed due to fear that storage tanks are growing dangerously close to full amid the coronavirus pandemic, which has severely curtailed global demand for crude oil and refined products.

WTI price for May delivery settled down US$55.90 Monday at negative US$37.63 per barrel. Those contracts are to expire on Tuesday.

Meanwhile, futures contracts for June delivery were down US$4.60 at US$20.43 per barrel.

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Senior analyst Martin King of RBN Energy said storage at the Cushing, Okla., WTI trading hub is expected to hit capacity within four weeks.

(The Canadian Press)