Oil Demand Collapses, Price Goes Negative For First Time in History

April 20, 2020 - 8:19 am

Oil prices plunged to their lowest level since at least the 1980s today when the cost for a barrel of crude dropped below $1.

Prices for West Texas Intermediate, the American benchmark of crude oil, plummeted to the lowest prices on record. US crude oil May contract finishes the day at negative $37.63; a price crash of 300 percent.

Consumer 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.

Experts say storage tanks across the US could hit their limits within three weeks, according to Chris Midgley, head of analytics at S&P Global Platts.

“Basically, bears are out for blood,” analyst Naeem Aslam of Avatrade said in a report, according to the Associated Press. “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.”

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