The price of Texas Intermediate Oil (WTI) has gone into free fall less than two hours after the market closed and has sunk below zero due to the coronavirus crisis and the consequent fear of traders, making it trade negative for the first time in history.

Texas oil fields

 

At 13.25 local time in New York (17.25 GMT), WTI futures contracts for delivery in May, which expire this Tuesday, were 13.46 dollars less than in Friday’s session, deepening the downward trend of the negotiations prior to the opening of the market and aimed at recording the worst day in history for the reference crude oil in the United States.

According to analysts, the collapse is due to fears about the lack of capacity in the U.S. power to store oil amid the abysmal decline in demand caused by the halt in activity as a result of the coronavirus.

The market remains volatile despite the fact that the Organization of Petroleum Exporting Countries (OPEC) and its partners agreed in early April to reduce production by 9.7 million barrels per day to compensate for the cut in demand linked to COVID-19, which investors do not seem to think is enough.

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