US oil market collapses with WTI dropping below $0 a barrel

US oil market crashes with WTI dropping bel $0 a barrel
US oil market crashes with WTI dropping below $0 a barrel
West Texas Intermediate (WTI) oil prices collapsed by almost 100%  and have gone negative in a record low for the US benchmark.
Vanishing demand and a glut of supply have combined to heavily impact the US benchmark fuel, with prices dropping from $18.27 to close at -$37.63 a barrel on Monday – down over 300 percent from the previous day’s close. It’s the first time the crude oil futures contract has ever traded in the negative since the New York Mercantile Exchange (NYMEX) started trading it in 1983.
WTI oil futures with delivery in May 2020 collapsed by almost 100% to $0.01 a barrel on the London-based ICE on Monday.
WTI oil prices reached the zero level for the first time in their history. At the same time, WTI oil futures with the settlement in June lost 14.1% to $21.5 a barrel.

Global oil storage is currently reaching its limits, and while OPEC recently secured a 9.7 million barrel per day cut in production, the US Department of Energy is nevertheless weighing the idea of paying domestic producers to simply leave the oil in the ground so as not to further depress prices.

With May’s futures contracts set to expire on Tuesday, investors are scrambling to unload their positions, eyeing the already-glutted market and concerned about being left with a valueless commodity.

 

 

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Chief Assignment Editor

Chief Assignment editor is Oleg Siziakov

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