West Texas Intermediate (WTI) crude oil just made a huge move and sold-ff its oil at an extremely low cost. The impact isn’t sending shock waves around the world, but the company has been a large figurehead for crude oil in America.
WTI Has Massive Sell-Off
Before COVID-19 took the world by storm, the prices for oil were in a weird phase. Countries like Saudi Arabia and Russia had begun a dual with each other over who could make their gas prices lower. This happened just before everyone across the world stopped driving.
Obviously, the supply and demand for crude oil became crazy as low demand was met with an already low sell-off point. For places like WTI, this was the hardest hit they had ever taken.
WTI delivers their own oil, which comes at a cost to the company, especially now. If they deliver their own oil, that means they need to store it. With the large quantities that they currently have and with no one buying it, they either needed to put it in storage which costs more or sells it for far less than the already staggering low current price.
How Does This Affect Trucking?
Well, it doesn’t really. Where a company like WTI focuses on national distribution, other companies focus on international production, shipping, and storing.
Another company benchmark: Brent has had a much “easier” time dealing with the price. Since they deal with international diesel rather than traditional gasoline. If they were to sell of at low prices then the industry would feel it.
With global fuel price continuously going downward, many often wonder how long this will last and how far it will continue to drop. For the trucking industry, this could create a lesser burden for an already over extended workforce. Gas prices lowering can help ease the pain that all truckers currently face.