The Moscow stock exchange for one day suspended trading benchmark North sea mark Brent crude oil and North American WTI. About change of schedule of the trades on April 21 reported on the website of the exchange.
“This decision was made to prevent the occurrence of additional adverse effects from trading participants and their clients in connection with the unprecedented decline of prices at the auctions the corresponding contract on the NYMEX [new York Mercantile exchange] April 20,” the statement reads.
The report notes that the decision was accepted in connection with falling of the prices for oil WTI on the new York stock exchange to negative $37.6 dollars per barrel during the session on April 20.
Term contracts for the supply of raw materials with due date in may will expire today in the afternoon, so the “reduction of the period of treatment on the part of the trading day specified contract on the Moscow stock exchange does not affect its pricing.”
April 20, the price of us WTI for the first time in the history was negative. As the findings of trading on the new York stock exchange, WTI was worth minus $16,74 per barrel. According to the Agency Reuters, 20 APR quotations fell to minus $40 per barrel.
It also triggered the collapse of prices on the European spot market (prisoners in this market contracts are executed immediately). The estimated price of the Russian benchmark Urals oil fell to minus $3 per barrel of North sea benchmark Brent crude to minus us $3.5.
By the morning of 21 April the may futures of WTI has returned to positive values and was trading at $1,42 per barrel.
The rapid fall of oil prices caused a record drop in demand for hydrocarbons because of the pandemic coronavirus, and the ensuing economic crisis and fears of traders that storage facilities will soon be filled.
As noted by the professional edition of ICIS, the traders tried to sell the may futures as they are traded today is the last day. However, due to the limited number of customers, the rate has moved into negative territory.
Oil prices decline despite progress in early April, the agreement of the Organization of countries – exporters of oil and its allies to cut oil production to 9.7 million barrels per day in may and June, which is about 10% of the total placed on the market of raw materials. About the same volume should provide countries outside of OPEC, but, as noted by Reuters, this is not enough to remove the excess from the market.