It’s a crash of epic proportions…
Update: WTI has crashed below zero:
Well, it costs even less now as prices for some Canadian Crude Oil have even gone negative.
Is a negative price for crude oil the same as negative interest rates, meaning consumers will be paid to just take the oil, at least in theory?
Regardless, the price of West Texas is crashing too.
The spectacular collapse in oil markets is showing no signs of easing, as the coronavirus crisis saps demand and producers run out of places to store all their excess barrels of crude.
What’s happening: US oil prices plunged 94%, falling as low as $1.02 per barrel Monday. That’s the lowest level since NYMEX opened oil futures trading in 1983.
The selloff can be attributed in part to market mechanics. The May futures contract for West Texas International, the US benchmark, is about to expire. Most investors are already focusing on the June contract, thinning out trading volume and feeding volatility, UBS analyst Giovanni Staunovo told me.
The June futures contract for WTI is trading just below $22 per barrel, but that’s still more than 12% down on the day. Brent crude futures, the global benchmark, fell 3.8% Monday to $27 per barrel.
Zero Hedge is even showing a print below $1 per barrel:
Which followed this interesting little tidbit:
Update (1250ET): The CME just issued a statement that May WTI Futures can trade negative, which sent the May contract reeling to a $4 handle (low $4.04)…