( Reuters) – The cost of a barrel of benchmark U.S. oil plunged listed below $0 a barrel on Monday for the very first time in history, a troubling sign of an unprecedented global energy glut as the coronavirus pandemic halts travel and curbs financial activity.
A 3D-printed oil pump jack is seen in front of a displayed stock graph and “$ 0 Barrel” words in this illustration image, April 20,2020 REUTERS/Dado Ruvic/Illustration
The contract for West Texas intermediate crude, or WTI, is the criteria for U.S. crude oil rates. On Monday, it looked like this:
( GRAPHIC: U.S. crude oil’s historic crash below no – here)
Such a high drop in the oil standard prompted strong reactions beyond trading floors. Even domestic doyenne Martha Stewart tweeted about it. here Here is a description of what negative crude costs suggest in the real world:
WHAT DOES A NEGATIVE FUTURES PRICE MEAN?
The rate of a barrel of crude varies based upon factors such as supply, need and quality. Supply of fuel has actually been far above demand given that the coronavirus forced billions of individuals to stop traveling.
Since of oversupply, tank for WTI are ending up being so full it is challenging to find area. The U.S. Energy Information Administration said last week that storage at Cushing, Oklahoma, the heart of the U.S. pipeline network,