NEW YORK: The price of a barrel of benchmark US oil plunged below US$0 a barrel on Monday for the first time in history, a troubling sign of an ...
on Monday for the first time in history, a troubling sign of an unprecedented global energy glut as the coronavirus pandemic halts travel and curbs economic activity.
"There's no available storage anymore so the price of the commodity is effectively worthless," said Bob Yawger, director of futures at Mizuho in New York."So when it's minus a dollar, they'll pay you a dollar to get it out of there." The June contract, with delivery a month away, is still trading at above US$20 a barrel, but the price crash indicates that most storage space has been gobbled up.The crash in crude futures prices at Cushing won't necessarily translate into a crash in prices at the gas pump, said Tom Kloza, a veteran analyst with Oil Price Information Services.
The plunge in crude futures also indicates that the market does not expect airlines to add back many flights to their slimmed down networks any time soon, said Raymond James analyst Savanthi Syth.While investors and analysts wade through the technicalities of the oil markets that contributed to the crash, others are trying to glean what it might say about the economy.
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