The price of oil in the US had turned negative for the first time in history. Oil prices plunged, falling below $0 on Monday to $-37.63 a barrel. That's the lowest level since NYMEX opened oil futures trading in 1983.
New York: US oil prices rebounded above zero on Tuesday, a day after futures ended in negative territory for the first time as coronavirus-triggered collapse in demand leaves the world awash in crude.
US benchmark West Texas Intermediate for May delivery was changing hands at $1.10 a barrel after closing at -$37.63 in New York.
The May futures contract expires on Tuesday, meaning traders who buy and sell the commodity for profit needed to find someone to take physical possession of the oil.
But with the glut in markets and storage facilities full, buyers have been scarce.
Traders are now more focused on the contract for June delivery, which had trading volumes more than 30 times higher. That also rebounded Tuesday, rising to above $21 a barrel following a close of $20.43 a barrel in New York.
Brent crude, the international benchmark, was changing hands at $25.61 a barrel for June delivery, up 0.15%.
Oil markets have plunged in recent weeks as lockdowns and travel restrictions to fight the coronavirus around the world batter demand.
The crisis was worsened by a price war between Saudi Arabia and Russia. Riyadh and Moscow drew a line under the dispute and, along with other top producers, struck a deal to cut output by almost 10 million barrels a day earlier this month.
But prices have continued to fall as analysts say the cuts are not enough, and as storage facilities reach capacity.
US crude's collapse on Monday was triggered in part by the closely monitored WTI storage facility at Cushing, Oklahoma filling up, as well as traders closing out their positions before the expiry of the May contract.
Oil prices plunged below zero on Monday as demand for energy collapses amid the coronavirus pandemic and traders don't want to get stuck owning crude with nowhere to store it.
The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell as low as minus $37.63 a barrel on Monday.
With agency inputs
Last Updated 21, Apr 2020, 10:04 AM