Coquest Daily Energy Report 04.21.2020

Crude Oil Futures for May 2020 settled up $47.64 @ $10.01/bbl trading in a $30.60 range including the overnight-RBOB settled down 15.80/cpg and Heating Oil settled down 16.09/cpg.
An historic rout in oil markets saw WTI futures contracts for May 2020 plummet to as much as minus $40.32/bbl. as producers rushed to get rid of unwanted stocks with storage capacity already overflowing amid the current Coronavirus
induced demand collapse. According to leading advisors, there is ultimately a finite amount of storage left to fill and production will soon need to fall to bring the market into balance. After that, the physical reality of a still massively
oversupplied oil market will likely exert downward pressure on the June and July 2020 contracts. The historic drop in WTI prices is an indication of the downward pressure which many other crude oil grades could face, given the oversupply
situation.

Natural Gas Futures for May 2020 settled down $0.103 @ $1.821/mmbtu trading in a .195 cent range including the overnight session.
According to data, the rapid collapse of NYMEX traded West Texas Intermediate futures on Monday caused crude’s premium over natural gas to turn into a deficit for the first time ever. If the current scenario continues, it could prompt
producers to search for gas instead of oil in future months – especially if gas demand recovers as expected when the economy sna ps back after governments loosen travel restrictions once the Coronavirus spread slows. Since the start of the
year, U.S. crude futures have tumbled over 150% while gas futures were down about 11% so far this year-due primarily to the pandemic’s demand loss.

Back