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Crude producers, refiners and traders in the US may move to fixed-price contracts after the May NYMEX WTI contract collapsed to minus $37.63/b on April 20. The collapse was attributed to expiry dynamics, a storage squeeze and weak refinery demand.
Settlement then rebounded to $10.01/b.
Extreme volatility and possible shifts to fixed pricing change how crude is priced and hedged, which adds uncertainty to energy costs. The direct effect on feed-grain prices is limited.
spglobal.comKristian Tialios, Felix Clevenger, Laura HuchzermeyerApr 29, 2020Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
