Demand for oil has dropped as Coronavirus pandemic has forced people to stay indoor in quarantine and self-isolation along with that lockdown across the World has badly affected industrial and economic activities.
Oil companies have resorted to renting tankers to store the surplus oil supply and that has forced the price of US oil to turn negative for the first time in history. As a result, The price of US oil has turned zero and negative for the first time in history. That means oil firms will pay some traders to get rid of oil, instead of them paying money to buy it over fears that oil storage capacity could run out in May.
The price of 1 barrel fell as low as minus $37.63 a barrel. It broke the previous lowest price record which was set in 1986 that was near $10 a barrel.
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According to Article published on CNN On April 20, 2020 “Hundreds of US oil companies could go bankrupt”. As many oil firms took on an excessive amount of debt during the great times. Some of them aren’t ready to survive this historic downturn caused by the Coronavirus pandemic.
Edward Moya, who has more than 20 years’ trading experience and is currently working as a senior market analyst at Onada said: “We are running out of space to store oil, There is no place to put it”.
According to CNBC Crude oil falls 300%
BREAKING: Crude oil falls 300% to nearly negative $40 per barrel https://t.co/HlsH3slbGO pic.twitter.com/2SEY8DJyk7
— CNBC Now (@CNBCnow) April 20, 2020
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