Here are 10 things to know about the US crude oil price today:
May crude oil price futures settled at minus $37.63 a barrel on Monday, a 306 per cent daily drop, driven by the rapid filling of the main US storage hub at Cushing, Oklahoma - the delivery point for West Texas crude.
The contract for West Texas intermediate crude, or WTI, is the benchmark for US crude oil prices. (Also Read: Crude Oil Price - What A Negative Futures Rate Means For Consumers)
The price of a barrel of crude is based on factors such as supply, demand and quality. A negative closing means that producers are paying traders to take the oil off their hands.
Because of oversupply, storage tanks for WTI are becoming so full it is difficult to find space. The US Energy Information Administration said last week that storage at Cushing, Oklahoma, the heart of the US pipeline network, was about 72 per cent full as of April 10.
Global oil supply has been far above demand since the coronavirus pandemic has dealt a severe blow to economic activity around the world and sapped demand for oil.
However, the prices of June oil futures contracts continued to trade above $20 per barrel, unaffected by the bizarre movements in the May contract.
"In what was previously thought unthinkable, Near month April Nymex WTI contract traded below $0 per barrel on expiry day yesterday. There was massive long liquidation as traders unwound long positions on fear of having to take delivery," said Abhishek Goenka, founder and CEO of forex advisory firm IFA Global. "Storage space is running out. The Brent on the other way was relatively well behaved as storage concerns are less pronounced for Brent which is drilled from the North Sea."
While the Organization of the Petroleum Exporting Countries (OPEC) and its allies finalised a historic agreement earlier this month to cut production by 9.7 million barrels per day beginning May 1, many argue that it still not enough to counter the fall in demand.
In a silver lining of sorts, the US oil prices rebounded into positive territory on Tuesday after a historic plunge witnessed in the previous session. The futures for May delivery of West Texas Intermediate rose nearly $39 but were still just $1.76 a barrel.
The contract expires at the end of trade on Tuesday, which is pushing investors to clear them from their books at any price.