CNBC's Jim Cramer joins "Squawk Box" with his initial thoughts on the drastic drop in oil prices on Monday morning. U.S. oil prices were on track for their worst day on record on Monday, with crude storage facilities filling rapidly as the coronavirus pandemic continues to crush demand.
The May contract of U.S. West Texas Intermediate (WTI) futures fell to $11.54 a barrel on Monday, down more than 36%. It means the price grade is on pace to register its worst day back to contract inception in 1983.
To be sure, the May contract expires on Tuesday, thus leaving it exposed to weaker trading volumes and more extreme market moves. The June contract of WTI, which is more actively traded, stood at $22.29 a barrel, almost 11% lower.
Meanwhile, international benchmark Brent crude stood at $26.41 on Monday, around 6% lower for the session.
It comes amid heightened concern that the volume of oil held in U.S. storage is rising sharply, with the coronavirus crisis compounding the problem by dramatically reducing consumption.
“The current forward crude oil curves for Brent and WTI are now in very deep contango, but the contango is also very front-loaded,” Bjarne Schieldrop, chief commodities analyst at SEB, told CNBC via email.
A contango market implies oil traders believe crude prices will rally in the future, encouraging them to store oil now and to sell at a later date.
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