Moscow. October 26. Oil prices lower on Monday, with the market situation of contango, the oil for delivery in the near month is significantly cheaper than contracts with later delivery dates, reports Bloomberg.
So, the price of December futures for WTI of about us $0.9 lower than the January futures is the maximum decline since may.
The cost of the December futures contracts for WTI crude oil during trading on the new York Mercantile exchange (NYMEX) decreased by 18:08 MSK $0.5 (1,12%) – to $to 44.1 per barrel. Meanwhile, the January futures for WTI traded at $45,03 per barrel.
Futures price for Brent oil for December on London’s ICE Futures exchange had fallen to $0,36 (0,75%) to $47,63 per barrel.
This situation on the market, according to experts, due to the growth of oil reserves in the United States. For the past four weeks crude oil inventories to have increased by 5% to 477 million barrels, the highest level for this time of year since 1930.
“The expansion of contango will increase the accumulation of oil in storage and to exert further pressure on spot prices for oil” – the analyst in the resources sector Tyche Capital Advisors Tariq Zahir.
Meanwhile, experts at Goldman Sachs have noted that the power used for petroleum storage, close to maximum load. This, in their opinion, would contribute to a further decline in oil prices.
“Available capacity for storage of distillates in the U.S. and Europe at near record highs amid high capacity utilization at refineries, and only moderate growth in demand”, – said in the review Goldman Sachs.