Oil prices fell on Monday, with a U.S. crude futures contract hitting its lowest level since 1999, depressed by concern that U.S. crude storage will soon be full while companies prepare to report the worst quarterly earnings since the financial crisis.

Brent (LCOc1) was down $1.12, or 4%, at $26.96 a barrel by 1008 GMT.

The front-month May WTI contract (CLc1) fell $4.79, or 26.2%, to its lowest since March 1999 at $13.48, though the sell-off was exaggerated by the contract’s imminent expiry.

“The May contract is set to expire tomorrow and the bulk of the open interest and volume is already in the June contract,” said ING’s head of commodities strategy, Warren Patterson.

The June contract , which is more actively traded, fell $2.18, or 8.7%, to $22.85 a barrel.

The volume of oil held in U.S. storage, especially at the Cushing delivery point for the U.S. West Texas Intermediate (WTI) contract in Oklahoma, is rising as refiners throttle back activity in the face of weak demand. [EIA/S]

“As production continues relatively unscathed, storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices,” said Rystad’s head of oil markets, Bjornar Tonhaugen.

Oil in floating tanker storage is also estimated at a record 160 million barrels.

The mood in other markets was also cautious as the first-quarter earnings season gets underway. Analysts expect STOXX 600 companies to post a 22% plunge in earnings, which would represent the steepest decline since the 2008 global financial meltdown, IBES data from Refinitiv showed.

Last updated on Mon., April 20, 2020.