On April 20, WTI crude oil futures market prices in the United States fell sharply, with June contract at $20.43/ barrel, down $4.60 (-18.4%). Brent crude oil futures market prices fell sharply, with the main contract at $25.57/ barrel, down $0.26. At one time, the contract fell to a negative range in May, but from the perspective of the contract in June, the negative value was the exception, not the normal state of the global crude oil market.

June contract is the most active main contract in the current WTI futures market. Although the decline was more than 18% the day before, the trading price was more than $20/ barrel, still at the bottom range of the $20/ barrel.

WTI contract fell by more than 300% in May, but it is not the main contract, which shows that oil companies that need to make physical delivery of crude oil in the near future may not find a place to store crude oil. In particular, the decline of refining capacity of American refineries leads to the gradual increase of crude oil inventory, and the lack of demand caused by the combined epidemic of COVID-19 has reached the limit of American oil storage equipment. According to data, as of the week of April 17, crude oil inventory in Cushing, the delivery place of West Texas light crude oil on the New York Mercantile Exchange, increased to 61 million barrels, and the crude oil inventory capacity in Cushing was about 78 million barrels. Cushing faces the risk of expansion. In addition, we can see the clue from the floating oil storage. The data shows that the offshore floating oil storage in July 2019 was about 24 million barrels, but up to now, it is estimated that the long-term floating oil storage has reached a record 160 million barrels. According to SunSirs, the urgency of global storage capacity may cause unprecedented pressure on oil prices in the future, and oil prices may continue to decline. In particular, the epidemic may affect demand in a long term. According to the agency's calculation, the current crude oil demand has dropped by 30%, about 30 million barrels/ day. However, from the perspective of OPEC and other oil producing countries' production reduction, it is obviously not enough.

In addition, the decline in fuel demand may lead to more and more refinery capacity decline, which will further aggravate the crude oil surplus and inventory shortage. Due to capital constraints, crude oil drilling companies have cut costs and cancelled plans. According to Baker Hughes service, US crude oil drilling companies closed 13% of us drilling platforms this week, so far, more than one third of them have US drilling has been shut down; however, OPEC+ production reduction agreement can not solve the recent problems. The date of OPEC+ production reduction agreement is May 1, and from the latest exposed information, it was reported on April 20 that Russia has increased its oil production by nearly 1% in the past three days, which shows that the multi interests of the market do not tend to be consistent, which also makes more market people lose confidence in the production reduction agreement, which will cause the oil price to remain in a bearish state and further increase the downward pressure.

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