June holding up ok
The only valuable oil is the stuff on paper. The drop in the May WTI contract ahead of tomorrow's settlement is a crystal clear indication that the only demand for oil is from traders who have no intention of taking delivery.
May WTI is down a whopping 45% in the worst day ever for a crude oil contract. The low so far is $10.01.
The open interest is in the June contract but this is a massive wakeup call to anyone who owns it. You can't pretend that oil demand is going to return in a month. June crude is down $2.16 to $22.87 and in normal times, that would be a massive drop but today it's only 8.7%.
Here's a look at the long-term front month contract. We'll see a pop back above $20 on Wednesday provided the June contract holds on but it's an ugly picture any way you look at it:
