Photo is for illustration.
Oil prices plunged below zero on Monday as demand for energy collapses amid the coronavirus pandemic and traders don’t want to get stuck owning crude with nowhere to store it.
US benchmark WTI oil price closed at -$37.63/barrel.
Sellers of the May contract have just one more day to find buyers, but with storage in short supply, they are struggling to find takers.
The crude oil futures turned negative for the first time in history as storage space was filling up, discouraging buyers as weak economic data from Germany and Japan cast doubt on when fuel consumption will recover.
Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to slow the spread of the novel coronavirus.
The May US WTI contract fell $19.06, or 104.3%, to a discount of 79 cents a barrel at 2:09 p.m (1809 GMT) after touching an all-time low of -$1.43 a barrel. Brent was down $1.85, or 6.6%, at $26.23 a barrel.
The June WTI contract is trading more actively at a much higher level of $21.6 a barrel. The spread between May and June was more than $23, the widest in history for the two nearest monthly contracts.
Stocks were also slipping on Wall Street in afternoon trading, with the S&P 500 down 0.9%, but the market’s most dramatic action was by far in oil, where benchmark US crude for May delivery plummeted to negative $3.70 per barrel, as of 2:15 pm. Eastern time.
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 due to the coronavirus pandemic 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.
Brent crude was down 1 cent at $43.30 a barrel by 0807 GMT, while US West Texas Intermediate (WTI) crude up 1 cent at $41.08.
Brent crude futures climbed 2 cents, or 0.1%, to $43.43 a barrel at 0423 GMT while U.S. West Texas Intermediate (WTI) crude futures fell 7 cents, or 0.2%, to $41.53 a barrel. Both benchmarks rose as much as 0.5% earlier in the session.
Brent slumped to $22.5 a barrel leaving it down 65% for the year and hammering petro currencies such as Russia's rouble, Mexico's peso and the Indonesian rupiah by as much as 2%.
The new-generation Toyota Mirai powered by hydrogen offers a 100% electric driving experience with best-in-class efficiency and zero emissions underlining Toyota’s commitment to achieving carbon neutrality...
PlasmabilityTM, Crossworks Manufacturing, a member of the HRA Group, Dubai Holding (SJM Group) and Bond have entered into a strategic partnership establishing Eviqe Diamonds, a technologically advanced pioneer in luxurious, sustainable and ethically created diamonds and jewelry.
ValueMentor, a stalwart in the cybersecurity domain, recently concluded a two-day extravaganza, the ValueMentor Annual Awards 2023, in Dubai, marking a majestic celebration of their nine years of unparalleled achievements in the realms of cybersecurity and data privacy.
Summit to support unlocking green finance, enabling the Just Energy Transition, and explore how organizations can positively impact society and integrate sustainable practices into every corner of their operations