Mexican oil remains at its lowest levels for almost 22 years.
After the price touched negative ground on Monday April 20th, the Mexican export oil mix managed to rebound on Tuesday, ending at $ 7.12 USD per barrel, an increase of $ 9.49 from its previous price.
However, according to statistics from the Bank of Mexico (Banxico), Mexican oil remains at its lowest levels for almost 22 years (back on December 11, 1998 it quoted at $ 7.04 per barrel).
According to Banco Base, the WTI contract for the delivery of crude in May cut its losses, increasing by 126.60 percent and closing the session at $ 10.01 per barrel. Despite the return of this contract to positive terrain, it should be mentioned that the collapse in the price of oil extended to contracts in the following months.
This led to the WTI contract for the delivery of crude in June to register a sharp drop of 34.40% in its price, when it was trading at $ 13.40 per barrel and touched an intraday low of $ 6.50.
“This is worrying, as it makes evident the severity of the oil crisis and the fact that the world is running out of storage, prompting operators to ditch these contracts. There is a risk that as the expiration of June contracts approaches, they will see negative prices again ”.
He noted that the quarantine measures imposed to limit the spread of the coronavirus and mitigate the health crisis led not only to a drastic reduction in air and road travel, but also to a reduction in global economic activity.
So the destruction in demand accentuated the excess supply in the market, which in turn has led to storage tanks, ships and pipelines becoming saturated at an accelerated rate, Banco Base explained.
Source: Forbes
