Type Oil Negative
For the first time in history, the price of crude oil has gone negative — as a result of plummeting demand amid the coronavirus outbreak, Bloomberg reports. Oil traders are literally running out of space to store excess oil.
In a single day, the price of oil dropped far below the previous record, set in 1946, when the world was still recovering from World War 2.
A Storage Problem
So what does this mean?
“There’s no storage left for oil, so extra oil becomes worthless,” wrote author and climate advocate Eric Holthaus on Twitter.
“Oil companies are storing extra oil every way possible: filling oil tankers and parking them offshore, putting oil into pipelines and turning them off. At this rate global oil storage will be full in a few weeks,” Holthaus added.
Rock Bottom
Despite the record drops, investors are still pumping money into oil futures, according to Bloomberg.
“Refiners are rejecting barrels at a historic pace and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former,” Michael Tran, managing director of global energy strategy at RBC Capital Markets, told Bloomberg.
READ MORE: Oil Plunges Below Zero for First Time With May Contract Ending [Bloomberg]
More on the pandemic: THIS HEATMAP SHOWS SEVERITY OF COVID OUTBREAK IN EVERY US COUNTY
