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American Oil Crashes To $0 Per Barrel - Foreign Affairs - Nairaland

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American Oil Crashes To $0 Per Barrel by Cletus77(m): 10:36pm On Apr 20, 2020
The price of US oil has turned negative for the first time in history.

That means oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May
.

Demand for oil has all but dried up as lockdowns across the world have kept people inside.

As a result, oil firms have resorted to renting tankers to store the surplus supply and that has forced the price of US oil into negative territory.

The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell as low as minus $37.63 a barrel.


The severe drop on Monday was driven in part by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on Tuesday. Traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.

Oil price chart from 2000 to 2020
June prices for WTI were also down, but trading at above $20 per barrel. Meanwhile, Brent Crude - the benchmark used by Europe and the rest of the world - was also weaker, down 8.9% at less than $26 a barrel.

The oil industry has been struggling with both tumbling demand and in-fighting among producers about reducing output.

Earlier this month, Opec members and its allies finally agreed a record deal to slash global output by about 10%. The deal was the largest cut in oil production ever to have been agreed.

https://www.bbc.co.uk/news/amp/business-52350082

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Re: American Oil Crashes To $0 Per Barrel by Cletus77(m): 10:40pm On Apr 20, 2020
US oil prices turned negative Monday for the first time ever as the great oil crash of 2020 took a bizarre turn.

Crude finished at -$37.63 a barrel, marking the only time it has gone below zero since oil futures began trading on NYMEX in 1983.
The historic collapse shows just how terribly oversupplied the oil market has become. There are real fears that the world will soon run out of places to store barrels.

Producers are essentially PAYING to get rid of their barrels.
Part of the reason oil was so volatile is that trading volume was very light in the May contract, which expires Tuesday. That low liquidity set the stage for the unusual scenario of negative prices.

Although the May contract turned negative, the June contract was still trading above $20 a barrel. Brent crude, the world benchmark, traded above $25.

Crude finished at $18.27 a barrel on Friday, meaning they collapsed by more than 200% in one day.

US stocks also finished lower on Monday, amid a historic selloff in the oil market.

US oil futures settled in negative territory for the first time in history as demand for the commodity remains thin and storage capacity in the US is at its limit. The May futures contract is also about to expire, which made trading more erratic.

The Dow closed 2.4%, or 592 points, lower. It was the worst day for the index since April 1.
The S&P 500 finished down 1.8%.
The Nasdaq Composite closed 1% lower.


https://www.cnn.com/cnn/business/live-news/stock-market-news-042020/index.html

Lalasticlala, Mynd44, Seun, mukina2, HumbledbYGrace, osystein

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Re: American Oil Crashes To $0 Per Barrel by KingSatan: 10:41pm On Apr 20, 2020
The imminent fall of the American Empire.

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Re: American Oil Crashes To $0 Per Barrel by Nobody: 10:43pm On Apr 20, 2020
I hope Ahmadinejad's prediction isn't coming to pass. The former Iranian president never liked America grin

Nothing dey happen sha
Re: American Oil Crashes To $0 Per Barrel by Cletus77(m): 10:45pm On Apr 20, 2020
A roll of tissue paper is literally expensive than a barrel of oil shocked

Infact everything in America is more expensive than a barrel of oil

They're paying people to buy oil... WHAT!!!!!

Coronavirus should come and go pls
Re: American Oil Crashes To $0 Per Barrel by citygarden(m): 1:51pm On Apr 21, 2020
What is his prediction
fairfora:
I hope Ahmadinejad's prediction isn't coming to pass. The former Iranian president never liked America grin

Nothing dey happen sha

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