Business

Price of Oil Plummets Into Negative Territory for the First Time in History

By Matt Trammell matttrammell, Apr 20, 2020
 

SAN ANGELO, TX – As the Saudi-Russian price war and the Coronavirus pandemic continues many expected the price of oil to keep declining but Monday it plummeted below a penny. 

According to the Yahoo Finance, on April 20, West Texas Intermediate, the US marker, lost more than 250 per cent on Monday to trade as low as -$40.32 a barrel in a day of chaos in oil markets. Traders capitulated in the face of limited access to storage capacity across the US, including the country’s main delivery point of Cushing, Oklahoma.

This was the first time in US history that the price of oil was negative. With no storage capacity available producers are paying buyers to take barrels of oil off their hands. 

The May contract is a “horror show” and “heading into the worst delivery situation in history,” Phil Flynn, senior market analyst at Price Group Futures, told FOX Business. “With demand still dead and OPEC+ cuts not hitting fast enough, the market looks like it has no bottom.”

Demand for crude oil is projected to fall by 29 million barrels per day this month, according to the International Energy Administration, as COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease. Lower economic activity means weaker demand for crude oil and its byproducts, including gasoline and jet fuel.

So far this year West Texas Intermediate has lost 82% of its value. 

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If milk went to 25 cents a gallon, would you gripe? Or, say snuff went to a dollar a can, would all us snuff dippers whine? Let's say deer leases dropped to $1 an acre, would you give up your lease? Uh, the answer is no to all of the aforementioned.

The oil patch has ALWAYS been a boom or bust endeavor. Really, the only question is why isn't gasoline cheaper?

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" COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease."

It's a VIRUS not a DISEASE!!

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Yes, it is a virus, but a virus that causes physical manifestations detrimental to health, a.k.a. a disease.
You might recall a little virus known as HIV, that before effective treatment was introduced, almost always resulted in a fatal disease known as AIDS.

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Definition of virus
1a: any of a large group of submicroscopic infectious agents that are usually regarded as nonliving extremely complex molecules, that typically contain a protein coat surrounding an RNA or DNA core of genetic material but no semipermeable membrane, that are capable of growth and multiplication only in living cells, and that cause various important diseases in humans, animals, and plants
also : FILTERABLE VIRUS
b: a disease or illness caused by a virus
c: the causative agent of an infectious disease

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