Oil: American barrel listed in New York ends below zero dollar, unheard of

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At the end of a hellish session, a barrel of oil listed in New York for delivery in May closed on Monday at -37.63 dollars, investors and speculators being ready to pay to get rid of it for lack of storage.

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Oil breaks its worst records. This Monday, April 20, at the close, the barrel of crude oil listed in New York for delivery in May ended for the first time below zero dollars. This contract expiring Tuesday at the close, those who hold it must find physical buyers as soon as possible. But as stocks have already risen enormously in the United States in recent weeks, they have been forced to pay people to find takers: the barrel of WTI finished at -37.63 dollars.

There are two main reasons for this historic fall. The first is the drop in demand. The spread of the coronavirus has drastically reduced activities worldwide: from air to industry, demand for oil has plummeted. Before the crisis, the world consumed an average of 100 million barrels per day; according to various estimates, this figure has decreased by 6 to 20% since the appearance of the coronavirus. Fewer purchases mean lower prices. Far fewer purchases and a global recession outlook, and prices are plummeting.

The more so as a second factor frightens the investors: the saturation of the capacities of storage of black gold, in particular in the United States. Oil already extracted and not sold must wait somewhere. And on the American side, few tanks remain available: analysts estimate that more than 70% of American storage capacities have already been reached. Some producers therefore have no other choice but to sell off their barrels.

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• Oil
• United States