* Crude in U.S. storage near record high
* Brent ended last week down 24%; WTI off around 7%
* For graphic on oil price collapse, click:
* https://graphics.reuters.com/USA-OIL/0100B5LV472/index.html
(Adds comment, updates prices)
By Noah Browning
LONDON, April 27 (Reuters) - Oil prices slumped again on
Monday on concerns over scarce storage capacity, especially in
the United States, and global economic doldrums from the
coronavirus pandemic.
U.S. oil futures led losses, falling by more than $4 a
barrel on fears that storage at Cushing, Oklahoma, could reach
full capacity soon.
U.S. West Texas Intermediate June futures were down
$4.63, or 27.3%, to $12.31 a barrel at 1406 GMT.
Brent crude was down $1.81, or 8.4%, at $19.63 a
barrel. The June Brent contract expires on Thursday.
Oil futures marked their third straight week of losses last
week, with Brent ending 24% down and WTI off about 7%. Prices
have now fallen for eight of the past nine weeks.
"The market knows that the storage problem remains and we
are on a calculated path to reach tank tops in weeks. Prices
can't do anything else but decline when producers won’t have
anywhere to store oil soon," Rystad Energy head of oil markets
Bjornar Tonhaugen said.
The June WTI contract's price fall may have been triggered
partly by investors moving to later months after the May
contract lapsed into negative territory for the first time last
week just before its expiry.
"The shift of open interest away from June will have
negative consequences for the liquidity of the contract,
potentially leading to greater volatility in its price." Harry
Tchilinguirian, global oil strategist at BNP Paribas in London,
told the Reuters Global Oil Forum.
U.S. crude inventories rose to 518.6 million barrels in the
week to April 17, near the record 535 million barrels set in
2017.
Cushing, the delivery point for WTI, was 70% full in
mid-April, though traders said all available space was already
leased.
Global economic output is expected to contract by 2% this
year - worse than the financial crisis - while demand has
collapsed by 30% because of the pandemic.
In the United States, a record 26.5 million Americans have
filed for unemployment benefits since mid-March and the
Congressional Budget Office predicted the economy would contract
by nearly 40% annually in the second quarter.
"The current oil balance is simply awful, and no improvement
is anticipated until after June due to the massive fall in
global oil demand," said oil broker PVM's Tamas Varga.
The Organization of the Petroleum Exporting Countries (OPEC)
and allies including Russia, a group known as OPEC+, this month
pledged to cut output by an unprecedented 9.7 million barrels
per day in May and June.
Kuwait and Azerbaijan are coordinating oil output cuts,
while Russia is set to reduce its western seaborne exports by
half in May.
(Additional reporting by Florence Tan in Singapore and David
Gaffen in New York; Editing by David Goodman and Mark Potter)
BP (BP.)
