Contracts for June delivery were still trading for about $22 a barrel, down 16 percent for the day. Futures contracts that require buyers to take possession of oil in May are expiring on Tuesday, and nobody wanted the oil because there was no place to store it. Prices went negative - meaning that anyone trying to sell a barrel would have to pay a buyer $30 - in part because of the way oil is traded. At the start of the year, oil sold for over $60 a barrel but by Friday it hit about $20. Such an eye-popping slide is the result of a quirk in the oil market, but it underscores the industry’s disarray as the coronavirus pandemic decimates the world economy.ĭemand for oil is collapsing, and despite a deal by Saudi Arabia, Russia and other nations to cut production, the world is running out of places to put all the oil the industry keeps pumping out - about 100 million barrels a day. oil benchmark fell more than $50 a barrel to end the day about $30 below zero, the first time oil prices have ever turned negative. Something bizarre happened in the oil markets on Monday: Prices fell so much that some traders paid buyers to take oil off their hands.
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