Oil prices in the US have plunged below zero for the first time in history as demand for energy fell due to the coronavirus pandemic.
The drop into the negative area saw the bizarre situation where traders were being paid more than $40 to buy a barrel in a day of chaos in oil markets.
The dramatic decline in demand due to the COVID-19 crisis means storage facilities are nearly full.
The unprecedented fall was fuelled by traders not wanting to get stuck owning crude oil with nowhere to keep it.
According to analysts, tanks could hit their limits within three weeks, Naeem Aslam, of Avatrade, said in a report: “The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut.”
The collapse will be a blow to US President Donald Trump, who has gone to great lengths to protect the oil sector, including backing moves by OPEC and Russia to cut production and pledging support for the industry.
“We’re filling up our national petroleum reserves, the strategic reserves, and we’re looking to put as much as 75m barrels into the reserves themselves that would top it out,” Mr. Trump said at his daily news conference. “We’re going to either ask for permission to buy it, or we’ll store it, one way or the other, it will be full.”
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