Oil has dropped 99.95% today, at time of writing the price per barrel for USOIL is $0.01 and the futures markets are quickly dropping to sub-zero values. Yes, you get paid to take it away.
What’s Going On?
The price of oil appears to be reacting to concerns over storage of excess oil produce, due to the current coronavirus pandemic demand of oil has been cut by a third.
This has led to the markets going into negative territory for the first time in history.
Yahoo News reports:
The May contract for U.S. West Texas intermediate crude oil (CL=F), which expires on Tuesday, erased all value and dropped below zero for the first time in history. The June contract for the commodity (CLM20.NYM) also sank sharply, but held above $20 per barrel Monday afternoon.
“It should be noted however that near-term WTI prices are trading at massive discounts to later-dated contracts – primarily due to concerns about the storage hub in Cushing [Oklahoma] filling to capacity,” Deutsche Bank analysts wrote in a note Monday.
Prices for Brent crude oil, the international standard, also fell Monday morning, albeit by a less extreme margin than prices for U.S. oil. Brent was down 5.27% to $26.60 per barrel.
“With a huge surplus in crude products filling inventories on land, there is a clear benefit to those producers whom are able to put their oil out to sea,” Joshua Mahony, senior market analyst at IG, wrote in an email. “Unfortunately, the lack of demand and landlocked nature of production in the U.S. and Canada has already started to provide negative prices across a number of crude products in North America.”
Of course accessing oil at these prices for the average man and woman is virtually impossible.
We’ll keep you posted as this story progresses. Interesting times indeed!