(Reuters) – Wall Street tumbled on Monday after U.S. crude futures turned negative for the first time ever, with traders forced to pay to unload crude as the May contract expired during a global economic slump unleashed by the coronavirus outbreak.
The S&P energy index .SPNY tumbled 3.7% after the front-month May U.S. West Texas Intermediate (WTI) contract CLc1 actually turned negative, with sellers offering $37.63 a barrel to any traders willing to take it.
With billions of people staying home around the world due to the coronavirus, physical demand for crude has dried up.
“What the energy market is telling you is that demand isn’t coming back anytime soon, and there’s a supply glut,” said Kevin Flanagan, head of fixed income strategy at WisdomTree Asset Management in New York.
He said lower oil prices could boost the economy if it encouraged people to buy more fuel, “but that requires people getting out.