WTI oil falls below zero for the first time in history

The May futures contract for US West Texas Intermediate crude settled at minus 37.63 dollars a barrel on 20 April. It is the first time in history that the price of oil has been negative.

In effect, sellers were paying buyers to take the oil off their hands. The cause is a collapse in demand due to the pandemic and full storage facilities in the US, above all at the Cushing hub in Oklahoma.

The collapse affected expiring contracts. June WTI futures and European Brent crude traded considerably higher, at around 20 dollars a barrel.

Analysts warn that pressure on the market will persist until the global economy recovers. OPEC+ countries agreed earlier to cut output by almost 10 million barrels a day from May.