Oil closes at minus $37 a barrel as global storage reaches maximum capacity

[ghost]

Oil closes at minus $37 a barrel as global storage reaches maximum capacity

With demand at near-paralysis, oil and fuel tanks around the world are close to brimming.

 

The volume of oil held in U.S. storage is rising sharply at the same time as the coronavirus crisis is dramatically reducing consumption.Angus Mordant / Reuters file

 

 

April 20, 2020, 7:33 AM MDT / Updated April 20, 2020, 1:05 PM MDT

By Lucy Bayly

 

U.S. crude prices plummeted Monday, dropping by almost 300 percent to turn negative for the first time ever as cratering demand pushed storage facilities to their limits.

 

West Texas Intermediate, the U.S. benchmark crude, sank to an unprecedented low of minus $37.63 a barrel by the close of the oil market on Monday, a staggering level that essentially means producers would be paying buyers to take oil off their hands.

 

Oil set to be delivered in May was hardest hit, since that futures contract expires on Tuesday. The June contract also fell, though by a far smaller margin of 18 percent.

 

Social distancing lockdowns across the world have slashed demand to almost zero as much of the world's industry and travel have ground to a halt. Even a historic production cut agreement between OPEC and its allies did not provide the momentum required to stanch the surplus, as producing countries continue to pump oil ahead of the May 1 implementation.

 

In addition, tanks, ships, and pipelines are almost full, complicating the calculus for many U.S. producers who want to hold on to their oil until the outbreak subsides and there is greater demand.

 

The crash in the oil market is the latest sector of the economy to sustain serious — though temporary — damage from the coronavirus pandemic. Ahead of the OPEC deal, prices had plunged to 1991 levels and were struggling to recover amid a paralysis of the global economy.

 

The energy economy is forcing U.S. companies to make tough decisions. They are struggling to stay afloat as falling prices make them less competitive, and they are laying off workers.

 

“Even if we get the COVID-19 shelter-in-place protocols lifted by April 30, and we start to see some pop in demand, you are going to have so much oil sitting in tanks that, regardless of production cuts, you are still looking at a massive glut of oil going into the third quarter,” Stephen Schork, founder of The Schork Report energy newsletter, told NBC News.

 

NBC News

[ghost]

There are so much Crude oil in the market. They've ran out of places to store it. 

[dufus]

shale oil .... boom boom !

[ghost]

2 minutes ago, dufus said:

shale oil ....

a certain US ally flooded the market with so much crude oil, despite decrease demand due to Covid-19; in an attempt to kill US shale market.

[dufus]

8 minutes ago, ghost said:

ally

 

not for much longer ..... either accident or boom boom !

[ghost]

4 minutes ago, dufus said:

 

not for much longer ..... either accident or boom boom !

Very true.... It could get really messy and dangerous (politically, economically, etc.) Petrodollar dominance could be in danger.

[dufus]

the whole western financial system wall st ,  city of london corporation ..

[Karlston]

-$37 per barrel eh? I'll buy a billion barrels please, please deposit the $37 billion into my Savings account, and keep the oil.

[dufus]

you got to pay storage ...... and that,s at a premium  ( deep storage ) 😂

[truemate]

can we order it online ??