US crude oil futures prices turned negative today for the first time in history to end the session at minus $ 37.63 per barrel (which means that sellers will pay buyers) as dealers sell heavily due to the rapid filling of storage facilities at the delivery center in Cushing, Oklahoma.
Brent crude futures also fell, but in no case did they reach these weak levels thanks to more storage capacity available around the world.
US benchmark West Texas Intermediate contracts for May delivery ended the trading session as low as $ 55.9, or 306 percent, to settle at minus $ 37.63 a barrel after touching an all-time low of minus $ 40.32 a barrel.
Brent contracts closed down $ 2.51, or 9%, to settle at $ 25.57 a barrel.
"The warehouse is very full, which is making speculators not buying this contract, and refineries are operating at low levels because we have not raised orders to stay at home in most states," said oil market analyst at Price Futures Group in Chicago Phil Flynn.
With the actual depletion of crude demand, a global supply glut has created, while billions of people still need their homes to slow the spread of the new Corona virus.
Refineries process much less than usual crude, so hundreds of millions of barrels find their way to storage facilities around the world. Merchants rented
ships only to be used to store surplus oil. A record 160 million barrels are stored in tankers around the world.
Pointing to a report Monday from Ginscape Market Information Company, market analysts said that US crude stocks in Cushing rose by 9% in the week ending April 17 to reach about 61 million barrels.
WTI crude for June delivery saw more active trading and ended the session at $ 20.43 a barrel, a level well above May contracts. The difference between May contracts and June contracts widened in one of the session stages to $ 60.76, which is the largest in history for contracts for the nearest two months.
As US oil prices turn negative, this means that sellers had to pay buyers for the first time ever for oil futures contracts. Despite this, it is not clear whether this will find its way to consumers, who usually view the decline in oil as translating into a drop in gasoline prices at gas stations.
"Naturally, this will have a catalytic effect for the economy around the world ... It would normally be a good thing to add 2% to GDP," said Jeff Kildoff, partner at hedge fund (AGene Capital LLC) in New York.
Investors were quick to sell May contracts before they expired later on Monday in the absence of demand for actual oil.
Brent prices have collapsed about 60% since the beginning of the year, while US crude contracts have tumbled by about 130% to levels far below the commercial costs necessary for many shale oil producers. This led to the discontinuation of wells and sharp cuts in tunnels.