U.S. Oil Price Falls Below Zero
April 20, 2020
The price of oil fell below zero on Monday, April 20, 2020, because of the negative economic impact caused by the Cornonavirus pandemic in the United States, this trend has never been seen before in the country.
The barrel of U.S. oil for delivery in May has fallen to less than $37.60 per barrel, this is because investors are avoiding buying oil as they don't have a place to store it. Prices for other mixtures have also been affected, due to oil storage facilities approaching their limits.
This drop also affected the New York Stock Exchange, which went into the red: the Dow Jones was 1.04% and the NASDAQ gained 0.14 after losing points at the opening of the day.
For its part, the North Sea Brent barrel, a reference for the European and global markets, yielded 6.5% for $26.27 per barrel. The gap with the Barrel of European crude has reached its highest level.
The virus outbreak has extended the use of oil tankers to store crude oil until the quarantine ends, as a result the storage price has risen, for example, a vessel with a capacity of two million barrels costs about $100,000 per day for a six-month contract, previously this same time period was worth $29,000 per day, according to the Wall Street Journal.
The oil economy has had a dramatic decline in recent weeks, blockades and travel restrictions around the world have gradually affected demand for crude oil.
by Sol de Medianoche