US crude bounces back into positive territory after historic plummet below zero
A day after the shock collapse that unnerved investors and shook stock markets worldwide, West Texas Intermediate prices have gone up, offering some relief for those concerned as of Tuesday morning.
The US benchmark futures jumped by over 100 percent, crossing the $0 milestone again – albeit to trade at around $1.36 per barrel at the time of writing.
Earlier on Monday, a May contract for WTI – set to expire on Tuesday – finished trading at a shocking -$37.63 per barrel. However, the June contract rose to around $21.35 during Asian stock market hours.
Meanwhile, Brent, the global benchmark, is trading below $25 per barrel, suffering from a slight decline earlier in the day.
Monday’s WTI collapse marked the first time a crude oil futures contract has ever gone in negative territory since the New York Mercantile Exchange (NYMEX) started trading it in 1983. US markets also went down as a result, with the Dow Jones Industrial Average closing below 550 points on Monday, while the S&P 500 and Nasdaq fell by 1.6 and 0.8 percent respectively.
Global oil storage is currently reaching its limits because of the dropping demand caused by the coronavirus pandemic. Previously, OPEC+ managed to agree a 9.7 million barrel per day cut in production following marathon talks, but fears still persist that crude prices could remain at their lowest levels because of April’s supply glut.
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