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Yesterday WTI fell below the zero-dollar mark for the time ever, at one point reaching as low at minus $38/bbl. The news isn't much better today with Brent also collapsing overnight to the teens.
Those with exposure to the WTI price on the Australian Securities Exchange such as Australis Oil and Gas and Canada-focussed Whitebark Energy saw share price drops of 20%.
WTI rose to $1 per barrel yesterday and is now around $12.68/bbl while Brent is at $18.86/bbl.
Outside of US onshore there are reports of oil tankers being stuck off the US coast with nowhere to unload, and TankerTrackers suggest more Middle Eastern and Saudi oil is set to hit American shores over the next month.
The Texas Railroad Commission which oversees the state's hydrocarbon production in the state is meeting again, online, to consider cutting production, which it has not done since 1973.
Its meeting last week garnered 60 submissions with oilers divided on the benefit of cuts.
Texas is not famed for government intervention, especially in markets.
Economist Intelligence Unit analyst Peter Kiernan acknowledged the largely technical factors causing the plunge to negative US$38 per barrel but said it also reflected "the exceedingly bearish sentiment about the state of the oil market's fundamentals".
"Prices will show some normality once the WTI front month contract rolls over into June, as it is trading at above $20… price pressure will continue in the coming months as storage rapidly builds up and the global economic outlook remains decidedly weak, weighing down on oil demand".
He believes it will take some time before the promised OPEC+cuts of 10 million barrels a day have an impact.
A report from Refinitiv of yesterday also noted it was a "short term issue" and the June contract for WTI was priced at $20/bbl for now.
"It remains to be seen if the June contract will similarly fall into negative territory as it approaches expiry at the end of May," it said.
"By mid-April, production has fallen by about 700,000bopd, and that is clearly not enough. Expectations are that production will fall by 1.7 million to 2MMbopd by end-2020. It remains to be seen if the pace of the production fall will be enough to stem the collapse in price."
The International Energy Agency has estimated
oil demand this month could be down to 1995 levels with well over 20MMbopd demand wiped out.
It should be noted that $20/bbl is still below most producers' breakeven point.
Whitebark Energy managing director David Messina, which has the Wizard Lake oil project in Alberta, Canada, said his company traded on both Western Canadian Select and WTI streams, which is common in the province. Industry is still finding the oil price fall extremely difficult.
"It really is unbelievably difficult for those areas and Calgary's a classic oil town, it's like Houston and other towns in Texas that really do live and breathe oil," he told Energy News this morning.
Whitebark has cut production right back, and has operating costs of around C$7 per barrel and transport costs of $1/bbl but its Wizard Lake partner Point Loma Resources has been forced to sell
its share of the project to creditors, announced by Whitebark yesterday.