Whelp, I hope the complete destruction of the economy to protect ourselves from this virus was worth it. Maybe when we are huddled in the dark, without electricity or jobs while still in illegal, fascist lockdowns, we can take solace that we rode this train right off the cliff in solidarity!
The prices have come back up a bit after the low was reached a few minutes ago to -$23.50, but they are still in crazy town territory trading at negative prices. This marks the first time in history that the price has ever reached negative territory.
The fall in price was from May’s contract pricing, likely showing a huge drop in demand for oil. The jury is still out to see what happens to the prices for June. As of now, June’s oil prices are hovering around $20 a barrel.
HISTORIC CHART: WTI May oil futures settle at -$37.63 a barrel (yes, that's negative price). Of course, it goes without saying: that's an all-time low | #OOTT #OilPriceWar #covid19 via @TheTerminal pic.twitter.com/pM6S9u0wyc
— Javier Blas (@JavierBlas) April 20, 2020
With the lockdowns imposed by the state governors in the United States and in other countries, the options available to help improve this situation is becoming increasingly limited:
“The U.S. government’s ability to fundamentally change this situation are minimal,” said Raymond James oil analyst Pavel Molchanov. “The real problem is the fact that upwards of 20 percent of global oil demand is currently offline, mainly due to the Covid-related lockdowns.“
Thanks to Congress, the federal government does not have the funds to buy oil for pennies a barrel for the Strategic Petroleum Reserve. Apparently we cannot buy oil while the price is historically low because Orange Man Bad:
After Congress rejected an Energy Department request for $3 billion to buy oil to top off the nation’s Strategic Petroleum Reserve, the agency altered course and is now allowing companies to lease space in the facilities for 30 million barrels of oil. But even that amount, as well as another 47 million barrels that could flow into federal storage in the coming weeks, will do little to sop up the extra production that is adding more than 2 million barrels per day to private storage tanks.