21 April 2020 New York – Have you ever thought that the world would standstill? Had anyone dream about crude oil could traded as low as minus 37 USD? What would be the economy of those countries who holds all the crude oil or its pumping rights? Its a big turmoil in the history and some of the oil based economy may plunge into very low situation in the days to come.
According to the news reports, US crude oil May futures crashed into the negative territory for the first time in history on Monday, falling 305 per cent, or $55.90 a barrel, to minus $37.63 a barrel.
Falling fast and furious on Monday, the crash was driven by a glut of oil, shortage of storage facilities and massive 29 million barrels per day drop in demand. It was a ‘Black Monday’ when there were only sellers and no takers of the US crude.
Traders rushed to find storage on land and at sea in what is believed to be the biggest oil glut in history, which had pushed May futures earlier to a low of negative $40.32.
“It’s a dump at all cost as no one wants delivery of oil,” said Stephen Innes, chief global market strategist at AxXI Trader.
Oil tanks around the world are filling fast, despite a 50 to 100 per cent jump in lease costs, as oil companies and traders scramble to park unwanted crude and refined products. Millions of barrels are struggling to find buyers among industrial users and refiners, which have cut operations as the impact of the corona-virus has destroyed demand and a Saudi-Russia market share battle has led to a flood of supply.
As compared to US WTI, London’s Brent was more stable at $25.62 per barrel at 11pm on Monday night, down by just 7.8 per cent or $2.2 a barrel.
Those war against nations who has oil reserves may prove into mistakes of powerful nations in the history book.
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