May and June are nearing convergence
The May contract has quietly recovered a huge chunk of yesterday’s losses and is trading at $8.50 per barrel just 45 minutes ahead of final settlement. That reveals there is — at least — some real demand for crude oil barrels.
However the June contract is in a crunch because the USO ETF owns 30% of it and speculative longs are probably having second thoughts after yesterday. That’s leaving few buyers and it’s down 52% to $9.74.
The problem with that contract is that 30% of it is held by USO and the ETF simply can’t go negative without leaving someone with some stupendous losses.
Looking even further out, the July contract is now down $6.55 to $19.67 in another brutal drop and contracts out a year are down at least $3/barrel.