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Oil prices drop and storage areas are loaded fast

by Bunkerist
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Oil prices dropped on Monday, and oil storage areas around the world are rapidly filling. Concerns have been raised that production cuts may not develop fast enough to fully compensate for the collapse in demand from the coronavirus pandemic.

US oil futures dropped more than $ 2, leading to losses. U.S. crude oil inventories rose to 518.6 million barrels a week by April 17, close to the record level of 535 million barrels set in 2017.

West Texas Intermediate CLc1 June futures fell $2.05, or 12.1%, to $14.89 a barrel by 0638 GMT, while Brent crude LCOc1 was down $1.08, or 5.0%, at $20.36 a barrel. The June Brent contract expires this Thursday.

In oil futures, the third-week loss was recorded last week, and fell in eight of the last nine months. Brent dropped 24% and WTI 7%.

Cushing, the delivery point for WTI, was 70% full since mid-April, but traders have said that all available space has already been rented.

With regard to discontinuing production, equipment counts in the United States have dropped to the lowest level since July 2016, while the total number of oil and gas rigs in Canada has dropped to its lowest level since at least 2000.

While Kuwait and Azerbaijan coordinate cuts, Russia will halve its exports in the western sea in May.

The Alliance, including the Organization of the Petroleum Exporting Countries and the OPEC + group, including Russia, are committed to reducing unprecedented 9.7 million barrels a day in May and June.

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