US oil price futures collapsed to unprecedented below-zero prices in New York trading yesterday as a result of the coronavirus pandemic’s evaporation of demand that has left the world with excess oil and not enough storage space, meaning producers are paying buyers to take it off their hands.
The price of crude scheduled for delivery in May collapsed by 55.90 dollars, or 306 percent, to -37.63 dollars per barrel. This means that US traders will need to be paid to forward crude to the country’s main delivery point of Cushing, Oklahoma.
The previous record low figure, 10.42 dollars per barrel, was reached on March 31, 1986.
Considerably higher prices for June, registering approximately 21 dollars per barrel last night, indicate slightly better trader expectations concerning the supply and demand balance as the second half of the year.