REUTERS: An extreme situation has developed in the U.S. crude oil futures markets, as the current front-month May contract expiring on Tuesday has dropped by a whopping 40per cent, opening up the widest gap ever between it and the next contract, nearly US$11 a barrel.
As of 9:24 a.m. ET , the May contract was down US$7.25 at US$11.02 a barrel. Notably, just 70,000 contracts had changed hands. By contrast, the June contract was down US$3.08, or 12per cent, to US$21.96 a barrel, but had more than 435,000 contracts traded. The world's major oil producers agreed to cut production by 9.7 million bpd in an attempt to get world supply under control as demand slumps, but those cuts do not begin until May. Saudi Arabia is ramping up deliveries of oil, including big shipments to the United States.
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