The key U.S. oil benchmark, West Texas Intermediate, settled at a negative, ( - $37.67) today, on Monday the 20th of April 2020. This unheard of low price was the lowest oil price in history and was driven by a trading contract deadline, as traders desperately looked for buyers for the barrels of oil they normally hold in their books. However, buyers were no where to be found — even when the oil was being given away for free. So desperate traders, instead of the usual of paying to buy oil, were offering to pay as much as $37.63 to get someone to accept delivery of one barrel of oil!
The prices of other types of crude, without a vast approaching deadline, have not dropped as sharply, although in general, crude oil prices are very low and continue to fall. Brent, an international benchmark, is in the mid (-$20s) and fell more than 9% on Monday.
In early 2020, a barrel of West Texas Intermediate cost around $60, then prices dropped rapidly because of the coronavirus, ending up at around $18 a barrel on Friday, before Monday's big crash.
Oil-producing countries and companies are trying to reduce their output, but they can't keep pace with the extremely swift drop in global demand as the world economy comes to a halt.
This a new big issue as it is creating a huge oversupply of oil and raising concerns about where to physically store it all.
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