Oil Futures Drop Below Zero for First Time

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

 It’s been a historic day in the financial markets: Oil futures plunged below zero Monday for the first time as demand for energy collapsed amid the coronavirus pandemic. The plunge led to a drop in stocks, too: The Dow fell 592 points, or 2.4%, to 23,650; the S&P 500 fell 51 points, 1.7%, to 2,823; and the Nasdaq fell 89 points, 1%, to 8,560. But the market’s most dramatic action was by far in oil, where benchmark US crude for May delivery plummeted to negative $35.20 per barrel at 2:30pm Eastern, per the AP. It was nearly $60 at the start of the year. Much of the drop into negative territory was chalked up to technical reasons—the May delivery contract is close to expiring so it was seeing less trading volume, which can exacerbate swings. But prices for deliveries even further into the future, which were seeing larger trading volumes, also plunged.

Demand for oil has collapsed so much that facilities for storing crude are nearly full. Tanks could hit their limits within three weeks, according to Chris Midgley, head of analytics at S&P Global Platts. Benchmark US crude oil for June delivery, which shows a more ”normal” price, fell 14.8% to $21.32 per barrel, as factories and automobiles around the world remain idled. Big oil producers have announced cutbacks in production in hopes of better balancing supplies with demand, but many analysts say it’s not enough. “Basically, bears are out for blood,” analyst Naeem Aslam of Avatrade said in a report. “The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut.”

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Aston Martin chief leaves after 94% share price collapse

Aston Martin cars More Struggling luxury UK carmaker Aston Martin has announced that chief executive Andy Palmer has stepped down. Tobias Moers is taking over from 1...

Vush Is The Next Big Beauty Brand For Women

I know what you’re thinking, “What? Beauty Industry + Sex Toys?” -  3 Years ago this would have been a frowned upon alignment, but...

What Did Billie Eilish Do After Kurt Cobain’s Death?

What Did Billie Eilish Do After Kurt Cobain's Death?Do you know the truth about "Hit Me Baby One More Time"? Did you know...

Trump seeks to add 75 million barrels of oil to Strategic Petroleum Reserve amid historic price crash

+104.46%  President Donald Trump said Monday the U.S. is “looking” to add as many as 75 million barrels of oil to the Strategic Petroleum Reserve,...

Coronavirus may be upending the rules of the global oil game

The past three weeks have marked one of the most devastating periods in history for the American job market. The chart shown above is...
Home of Science
Follow me