21/04/2020 Tuesday, Sunny
A historic day. The future oil price turns negative!
The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell into negative territory for the first time in history on Monday, dropping to minus $37 a barrel.
But that only related to the May contract, which was about to expire.
Traders holding the contract were unable to find buyers, because no one with the ability to take delivery wanted it.
"Nobody wants to take delivery of oil next month because there's nowhere to store it, so the price dropped below zero," explained Rachel Winter, associate investment director at Killik & Co.
"This is an unprecedented demand drop. Nobody in their lifetime has seen anything like this," said James McNally of Third Bridge Group.
"Coronavirus is rewriting the rules of the global economy in front of our very eyes," said Adam Vettese, analyst at eToro.
A historic day. The future oil price turns negative!
The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell into negative territory for the first time in history on Monday, dropping to minus $37 a barrel.
But that only related to the May contract, which was about to expire.
Traders holding the contract were unable to find buyers, because no one with the ability to take delivery wanted it.
"Nobody wants to take delivery of oil next month because there's nowhere to store it, so the price dropped below zero," explained Rachel Winter, associate investment director at Killik & Co.
"This is an unprecedented demand drop. Nobody in their lifetime has seen anything like this," said James McNally of Third Bridge Group.
"Coronavirus is rewriting the rules of the global economy in front of our very eyes," said Adam Vettese, analyst at eToro.
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