India

Oil Prices Become Negative For The First Time In History; Producers Paying Customers To Buy The Excess!

By
OB Bureau

New Delhi: Oil prices have collapsed to a historic all-time low because of lack of storage facilities and demand amid the coronavirus crisis. US WTI crude futures on Monday crashed below $0 trading at $-39 a barrel. This means some producers are paying customers to buy the excess oil from them.

Brent is priced at $26.22, the lowest ever since World War II.

The output cuts agreed by OPEC, Russia and other producers are not sufficient to balance the loss in demand, experts note.

Refineries are processing less crude oil and storage are getting full all around the world. Traders have reportedly hired vessels just to anchor them and store the excess oil. There are reportedly 160 million barrels of oil in tankers around the world currently.

There will not be respite soon, experts say as economies around the world are in a poor state. Germany is in severe recession and recovery isn’t going to be quick as lockdown measures are not going to be lifted anytime soon, according to Bundesbank. Similarly, Japan’s exports are at their lowest in years.

OB Bureau

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