Novak explained the devastating collapse of prices for crude oil

the Minister noted that the collapse of quotations of the American oil occurred in connection with the sale of futures (contracts) for the supply of WTI in may, which is after the 20th of April is not traded on the stock exchange, as well as lack of demand for additional supplies of oil in may and the probability of overstocking of warehouses. “This caused a speculative financial instrument falling to negative values,” – said Alexander Novak.

He also stressed that now we should not dramatize the situation. “It is important to understand that this is a paper market, i.e. trade in derivative financial instruments, not physical oil. Quotations of June futures on Brent and WTI significantly higher, but also subject to volatility due to the General negative sentiment in the market”, – said the Minister.

the Minister reminded that the oil market is in a volatile state due to sharp fall in demand associated with measures to combat the spread of coronavirus, with a gradual glut of stores, and the uncertainty of the timing of global economic recovery. “The pressure on the market will last until the beginning of the agreement OPEC+ in may, reducing the production of countries outside of the agreement and facilitate restrictive measures. OPEC+ closely monitoring the situation and have, if necessary, all the possibilities for response”, – said Alexander Novak.