Oil futures collapsed to below zero for the first time ever as the deepening economic turmoil caused by the coronavirus crisis left traders desperate to avoid taking delivery of physical crude, Bloomberg reports.
In an unprecedented day of trading, the price for the May contracts wiped out all value, breaking every low for oil prices since 1946.
The price on the futures contract for WTI crude that is due to expire Tuesday fell into negative territory – minus $37.63 a barrel.
Sellers were actually paying buyers to take the stuff off their hands. The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American energy companies have run out of room to store it.
On Monday, a technical oddity exacerbated the price plunge as traders fled the May futures contract ahead of its expiration tomorrow. The following month’s contract fell 12% to $22.05 a barrel, making the spread between the two months blow out more than $20.