NEW YORK — Crude futures for March and beyond sank Tuesday, revealing broad pessimism in the markets over energy demand for the foreseeable future.
A limited number of traders took advantage of the February contract that expires Tuesday, the only month that saw prices rise.
Light, sweet crude for February delivery rose $2.23 to settle at $38.74 per barrel on the New York Mercantile Exchange.
The March contract, where the vast majority of trading took place, fell $1.53 to settle at $40.68.
The phenomenon is what traders call a “contango,” where oil that must delivered in the next few weeks is cheaper than the contracts in the months ahead.
The February contract has fallen about one-third in two weeks because of burgeoning supplies. Production cuts by the Organization of the Petroleum Exporting Countries have yet to create equilibrium in an energy market gripped by recession. Crude prices have been falling since July.
With storage tight on land, there are an estimated 80 million barrels of oil, nearly enough to power the world for a day, being held in large tankers offshore, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
