Corona impact: Oil prices go below zero due to fall in demand!
- IndiaGlitz, [Tuesday,April 21 2020]
Oil prices fell below zero for the first time yesterday due to the falling demand for fuels due to the coronavirus pandemic and traders aren't showing interest to store crude oil with no place of storage. The Wall Street Stocks witnessed a fall in stocks as well with S&P 500 down 1.2%.
The biggest fall in the market was in oil, as the US benchmark crude for May fell as low as negative $35.20, at 2:30 pm. Eastern time. While it was close to $60 in the beginning of 2020, now business shutdown orders across the world and automobile companies coming to a standstill due to Coronavirus has impacted hugely.
This oil price fall has been attributed to technical reasons, as the May delivery contract is set to expire expiring and there is a reduced trading volume. Oil Demand has reduced and the existing situation is that there are almost no facilities for crude oil storage. In three weeks, the oil tanks might reach their limits, as said by Chris Midgley, head of analytics at S&P Global Platts.