WTI extends decline to 40%, Canadian physical oil goes negative

Author: Adam Button | Category: News

The physical damage is even worse than futures

May WTI crude is now down $7.42 to $10.85 -- a drop of 40.6% on the day. It's the worst day ever for a crude contract. The June contract is also now down $3.28, or 13.1%, to $21.76.

Both of these numbers flatter what's happening in the North American physical market. There are various delivery points that are cushioned by non-nonsensical retail buying in oil futures. Some of those delivery points are also in spots where it's difficult to move crude. Here's a sampling of current prices:

  • Bakken UHC $2.36/barrel
  • Alaska North Slope $1.86/barrel
  • WTI Midland $14.11/barrel
  • Edmonton mixed sweet -$0.43/barrel
  • Edmonton C5 condensate -$4.68/barrel
It's all about that May contract today and tomorrow as we find out what the market for physical delivery looks like but the June contract is also increasingly ugly as it approaches the cycle low. So far retail keeps buying the dip but I think there's a rising chance they puke it in the days ahead:
The physical damage is even worse than futures

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