"What we are essentially seeing is that demand-supply mismatch in American crude basket, which doesn't impact Indian basket immediately," the official told Cogencis. Late Monday, the May West Texas Intermediate crude oil contract plunged over 300% overnight to trade in negative territory for the first time in history, as investors bailed out of the contract, which is set to expire today. In Asian trade today, however, the contract staged a rebound.
The official further said the government will keep a keen eye on Brent crude futures contracts over the next few days to gauge impact on domestic prices. The plunge is mainly due to crude oil storage facilities running out of space, with over 82% of the world's capacity to store oil already exhausted. Stocks at Cushing, Oklahoma, US, the delivery point for West Texas Intermediate crude, jumped 48% to 55 mln bbl since February, according to the US Energy Information Administration.
Cushing has a storage capacity of 76 mln bbl. Demand for crude has been hit due to the novel coronavirus outbreak as over 30% of the world's population is currently under complete or partial lockdown to curb the spread of the virus. Front month Brent crude oil contract on ICE Europe ended at $25.57 a barrel on Monday, down nearly 9% from the previous close. At 0928 IST, it was at $25.29 a barrel.
