COVID-19 Impact: US Oil Prices Collapse, Turn Negative as Demand Dries Up!

The US oil market has collapsed into negative prices for the first time in history as North America’s oil producers run out of space to store an unprecedented oversupply of crude left by the pandemic.

The price of US crude oil for May futures collapsed from $18 a barrel to -$38 in a matter of hours, forcing oil producers to pay buyers to take the glut of crude which they cannot store, as rising stockpiles of crude threaten to overwhelm oil storage facilities.

“The problem of the global supply-demand imbalance has started to really manifest itself in prices.

“As production continues relatively unscathed, storages are filling up by the day. The world is using less and less oil and producers now feel how this translates,” Bjornar Tonhaugen, head of oil at research firm Rystad Energy, was quoted as saying by The Guardian.

However, as per a report by TOI, the oil prices rebounded back above zero on Tuesday, a day after futures ended in negative territory.