The world on Monday woke up to the news that oil prices in the US had slipped into the negative, sending the traders into a tizzy. But Indian refiners will remain largely unfazed by the price crash in West Texas Intermediate (WTI) crude oil prices.
WTI is a marker that reflects the price of crude oil in the American market. Crude purchases by India’s domestic oil companies are priced closer to the Brent markers, which reflect prices in the Gulf region.
According to Indian Oil Corporation Ltd, India’s largest public sector refiner, “The sharp decline in crude oil prices, ultimately plunging WTI into a historic minus $37.63 a barrel yesterday (on Monday), was a result of panic selling on May 20 delivery contracts a day before its expiry date, failing which the delivery would have been necessarily amid Covid-19 related demand destruction and the storage constraints at Cushing, Oklahoma. However, WTI futures for June 20 as well as ICE Brent for May 20 are still trading at around $16 a barrel and $ 21 a barrel respectively.”