Oil prices extended their declines on Monday, April 20, 2020, as storage space ran low for the glut of crude no longer needed by economies hard hit by the coronavirus.
The June contract for West Texas Intermediate futures, considered the benchmark for U.S. crude prices, dropped 11.5% to $22.14 a barrel. Brent crude oil, the global benchmark, fell 6.1% to $26.38 a barrel.
The fall was more dramatic for the front-month May contract, which fell 36.9% to $11.53 a barrel, near its lowest level since 1999. With the May contract expiring Tuesday and no longer the most actively traded, oil watchers don’t consider it the most accurate reflection of price action.
When futures contracts come close to expiration, their price typically converges with the underlying price of physical barrels of oil. Otherwise, traders could profit from the difference between oil futures and oil barrels.
