On Monday, the US’ flagship crude oil grade slumped to trade at around USD10/barrel, the lowest since late 1998 on low demand as the coronavirus pandemic halted transportations, Saudi Arabia and Russia are in oil prices war, and storages get filled up quickly.
According to traders, the grade was traded at USD9.50 lower than benchmark prices in Midland, Texas, driving the outright price close to USD10/barrel. WTI at East Houston (MEH) crude traded at minus USD6.00 below benchmark futures, the new record low.
Prices for other export grades also dropped as Mars crude hit the lowest since 2008 by trading at USD8 below futures.
Going forward, traders opined that the Midland crude is likely to go lower as storage tanks around the US quickly being filled up and prompted producers in the Permian basin to shut output and refiners to cut crude run rates.
Affected by the weak demand, on Monday PBF Energy stated spending cuts and production reductions to minimum levels. Previously, Valero Energy Corp. and Exxon Mobil Corp. also have slashed production of gasoline, jet, and diesel as both managed the financial fallout of the outbreak.
