U.S. oil prices plummeted in historic fashion this Monday, crashing below zero as traders unloaded positions ahead of the May contract’s Tuesday expiration.
The contract for delivery in May expiring in the evening, the holders must find physical buyers as soon as possible. But stocks have already swelled enormously in the United States in recent weeks, they are forced to sell their prices and their falls are thus amplified.
The drop is less pronounced on the contract for delivery in June which will take over from tomorrow. It is currently trading around $ 20.95.
WTI oil plunged 305% to -$36.73 a barrel
West Texas Intermediate crude oil futures for May delivery cratered by 305 percent to -$36.73 a barrel. At a price below zero, buyers would be paid to take delivery as there are costs associated with transportation and storage. The selling had WTI on track to close at its lowest level since recordkeeping began in March 1983, according to Dow Jones Market Data.
The plunge in crude prices pressured oil majors Exxon Mobil and Chevron, which were the biggest decliners among Dow components.
Elsewhere, oil services provider Halliburton lost $1.02 billion in the first quarter and said it would cut costs by $1 billion as the crash in oil prices has decimated investment.
