For the first time ever, oil futures traded in negative territory on Monday. The New York Times Writes:
“A benchmark for oil that will be delivered next month went negative, meaning it was essentially deemed worthless, suggesting that people who had oil to sell were willing to pay for it to be taken off their hands.
“Oil that is scheduled to be delivered in June, more reflective of the market’s view on what the value of crude is right now, also fell, sliding 16 percent to about $21 a barrel.“
Nonetheless, worries over the price of oil are being blamed, in part, for the stock market dive today. CNBC calls it the “worst day on record” for oil prices. It makes sense that with fewer people driving and so many businesses shut down, there has been less demand for energy. CBS says, “Demand for oil has collapsed so much due to the coronavirus pandemic that facilities for storing crude are nearly full.” Now oil is trading in negative territory, as in $0 per barrel. The Washington Post says this is a “never-before-seen scenario that implies oil producers would have to pay buyers to take a barrel of oil off their hands.”
Some analysts also point to a move by Donald Trump for complicating the storage issues. As Reuters reported back in March, “Trump said on Friday that the United States would take advantage of low oil prices and fill the nation’s emergency crude oil reserve, in a move aimed to help energy producers struggling from the price plunge.” It’s a move that has backfired.
As for a drop at the gas pump, prices continue to fall with some cities starting to see gas prices track under $1.