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Oil prices plunge into negative territory
A lack of oil usage due to people staying at home and high volumes being produced has led to oil falling to negative territory for the first time in its history.

Oil prices plunge into negative territory
A lack of oil usage due to people staying at home and high volumes being produced has led to oil falling to negative territory for the first time in its history.

The benchmark price for crude oil plummeted to negative $35 a barrel as traders sought to avoid owning crude, as facilities for storing oil are nearly full.
David Winans, principal and credit analyst for PGIM Fixed Income’s US Investment Grade Credit Research, believes the price of oil will remain low while the virus is around.
“Today’s price move feels like oil is passing a kidney stone. A very painful move, but it can’t last for long, since producers are switching off wells as we speak,” Mr Winans said.
The “supply shock” from the OPEC+ collapse in March was really a mirage, the demand shock from COVID-19 is overwhelming everything. Ultimately, the path for oil prices is going to follow the path of this virus. Until demand shows some sign of life, oil prices will likely remain on life support,” Mr Winans explained.
Scott Haslem, chief investment officer, Crestone Wealth Management, also believes oil prices will not move up until life returns to normal.
“Oil is one of those markets, often true with global commodities, where demand and supply is genuinely more visible and calculable in the short term than others. Notwithstanding, oil still ultimately ‘feeds’ final consumer demand, it feeds a broad range of it, not the fickle consumer choice between one brand of car or one form of transport than another.”
Mr Haslem believes the collapse in the price of oil tells us less about a lack of storage facilities globally and more about a lack of demand and the sharp correction unfolding in mid-2020 global activity.
The major producers of oil have agreed to cut the supply, although this starts in May, leaving the 30 per cent reduction in the 100 million barrels of oil used in a day left in storage.
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