Nymex WTI front month futures trade negative
Veröffentlicht am 21. April 2020
The active Nymex West Texas Intermediate (WTI) oil contract (May) that will expire today briefly traded close to -US$40/bbl yesterday and is currently at US$1.42/bbl1. Later today the active contract will become the June contract which is trading at US$21.40/bbl2.
Figure 1: Intraday WTI oil May 2020 contract price
Source: Bloomberg, 21/04/2020.
Historical performance is not an indication of future performance and any investments may go down in value.
Looking at a generic front month WTI price chart (figure 1), one could be tempted to think that you could make close to $60/bbl out of thin air once we shift to the June contract. But you cannot, unless you have lots of physical storage space to hold the oil delivered for a month.
The reason for the negative price yesterday was because oil storage is getting very tight. People are actually being paid to take the oil and store it. The expiring contract will deliver the oil between May 1st and May 31st, so those who are long the contract and are taking physical delivery need somewhere to store it.
Equally those, who were holding the May 2020 contract, would most likely have rolled out the contract before yesterday’s big price moves, saving themselves from big losses.
As the WTI price in figure 2 below shows, all other WTI oil futures contracts maintained a positive price and did not fall anywhere near as hard as the front month contract.
Figure 2: Comparison of different WTI oil futures contract prices
Key: contracts on above chart: CLKO – May 2020, CLMO – June 2020, CLNO – July 2020, CLQO – August, CLUO – September. Source: Bloomberg, 20/04/2020.
Historical performance is not an indication of future performance and any investments may go down in value.
Bloomberg Commodity Oil Subindex
The benchmark Bloomberg Commodity Oil Subindex was tracking the May contract until 7th April, but then started rolling over to the July contract between 8th April and 15th April3. So that index would not have experienced the same price drop as the generic WTI price in figure 1.
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1 7am GMT on 21/04/2020
2 7am GMT on 21/04/2020
3 As per the Bloomberg methodology, the contracts roll between the 6th and 10th business days of the roll month: https://data.bloomberglp.com/professional/sites/10/BCOM-Methodology.pdf
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Über den Autor
Head of Commodities and Macroeconomic Research, WisdomTree Europe
@NiteshShahWTNitesh Shah ist ein Finanzexperte mit über 24 Jahren Erfahrung in den Bereichen Research und Anlagestrategie. Als Head of Commodities & Macroeconomic Research bei WisdomTree Europa leitet er Marktanalysen und -einblicke für die verschiedenen Anlageklassen, wobei sein Schwerpunkt auf Rohstoffen und börsengehandelten Produkten liegt. Zuvor war er bei Moody's, HSBC Investment Bank, The Pension Protection Fund und Decision Economics tätig, wo er sein Fachwissen in den Bereichen Marktanalyse und Strategie vertiefte. Nitesh Shah hat einen Master-Abschluss in internationaler Wirtschaft und Finanzwesen von der Brandeis University und einen Bachelor-Abschluss in Wirtschaftswissenschaften von der London School of Economics. Seine Einsichten werden häufig in den Finanzmedien zitiert und er ist ein gefragter Redner bei Branchenveranstaltungen. Außerdem ist er Moderator des Podcasts „Commodity Exchange“, in dem er über Trends auf den globalen Märkten spricht. Nitesh Shah begeistert sich für die Beratung von Anlegern und bietet ihnen umsetzbare Erkenntnisse, die ihnen bei der Orientierung in der komplexen Finanzlandschaft helfen.