Crude oil price recovers after record wipeout
Published On: Tuesday, April 21, 2020 | By: Team KnowMyStock
A very strange thing happened On 20th March in the oil market: Prices fell so much that some traders paid buyers to take oil off their hands. The price of the main U.S. oil benchmark fell more than $50 a barrel to end the day about $30 below zero, the first time oil prices have ever turned negative. Such an eye-popping slide is the result of a quirk in the oil market, but it underscores the industry’s disarray as the coronavirus pandemic decimates the world economy. How prices went Negative: Prices went negative means- anyone trying to sell a barrel would have to pay a buyer $30 — in part because of the way oil is traded. Futures contracts that require buyers to take possession of oil in May are expiring on Tuesday, and nobody wanted the oil because there was no place to store it. Contracts for June delivery were still trading for about $22 a barrel, down 16% for the day.
However today (March 21st) Oil prices rebounded with US crude turning positive.US West Texas Intermediate (WTI) crude for May delivery rose $38.73 to $1.10 a barrel by 0117 GMT after settling down at a discount of $37.63 a barrel in the previous session.
The May contract expires on Tuesday, while the June contract, which is more actively traded, jumped $1.72 cents, or 8.4 per cent, to $22.15 a barrel. Global benchmark Brent crude for June delivery was up 49 cents, or 1.9 per cent, at $26.06 per barrel.
Tags: crudeoil price
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