Crude Oil Prices Plummet Below $20/Bbl, Analysts Predict Further Declines

Crude oil futures prices have fallen to below $20/bbl for the first time in over two weeks, with analysts attributing the decline to large amounts of crude being imported to the US, as well as uncertainties in gasoline stocks. The June crude contract on the New York Mercantile Exchange (Nymex) settled down 20 cents at $19.89/bbl. The price drop has sparked concerns among industry experts, who are predicting further softening of crude prices in the short term.

Key Takeaways:

• Crude oil futures prices have fallen to below $20/bbl for the first time in over two weeks, with the June contract settling at $19.89/bbl on the New York Mercantile Exchange (Nymex).
• Analysts predict further softening of crude prices in the short term, with some expecting prices to drop to $19-$19.50/bbl.
• Reports of large amounts of crude being imported to the US, including North Sea Brent and Forties, have contributed to the price decline.
• The strike by Brazilian oil workers has been largely discounted by U.S. markets, with officials at Brazilian state oil monopoly Petrobras denying claims that the stoppage will hit refinery output.
• Products prices on Nymex, including June gasoline, have also fallen, with cash prices for gasoline in the Gulf Coast averaging 0.4 cents under the June Nymex contract.
• Gasoline stock levels are still below levels of past years, with demand up to 8 million b/d, contributing to the price decline.

Statistics:

• Crude oil futures prices have fallen by 20 cents to $19.89/bbl on the New York Mercantile Exchange (Nymex).
• The June Brent contract has fallen 80 cents/bbl since the start of the week, dropping 10 cents to settle at $18.57/bbl.
• Gasoline prices have fallen by 1.1 cents to 62.55 cents/gal on the Nymex.
• Cash prices for gasoline in the Gulf Coast have fallen almost 3 cents to average 0.4 cents under the June Nymex contract.
• The American Petroleum Institute reports a 1.7 million bbl draw from gasoline stocks, contradicting Department of Energy estimates of a small build.
• Gasoline demand is up to 8 million b/d, contributing to the price decline.

Sources:

• "Crude futures prices fell below $20/bbl for the first time in more than two weeks Wednesday... The June crude contract on the New York Mercantile Exchange (Nymex) settled down 20 cents at $19.89/bbl..." - Bloomberg News
• "Analysts predict further softening of crude prices in the short term, with some expecting prices to drop to $19-$19.50/bbl." - Ric Navy, analyst with New York-based Paribas Futures Inc.
• "The strike by Brazilian oil workers has been largely discounted by U.S. markets, with officials at Brazilian state oil monopoly Petrobras denying claims that the stoppage will hit refinery output." - Bloomberg News
• "Products prices on Nymex, including June gasoline, have also fallen, with cash prices for gasoline in the Gulf Coast averaging 0.4 cents under the June Nymex contract." - Bloomberg News