Oil plunges below $0 a barrel
Oil futures collapsed to below zero for the first time since 1946. This rock bottom has come amidst the economic carnage that the world is facing amidst the coronavirus pandemic. This reflects how oversupplied the U.S. oil market has become with industrial and economic activity grinding to a halt as governments around the globe extend shutdowns due to the swift spread of the coronavirus.
An unprecedented output deal by OPEC and allied members a week ago to curb supply has also not helped the situation.
“Refiners are rejecting barrels at a historic pace and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets.