- Oil prices have fallen to an all-time low with a barrel currently selling at -$36.73 after a 305% drop in prices
- This has led to buyers being paid to take delivery due to the costs associated with transportation and storage
- It has been projected that the demand for crude oil is likely to fall by 29 million barrels per day in April 2020
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Oil prices in the United States of America (USA) dropped by a historic 305% and now sells at -$36.73 per barrel.
The historic fall on Monday, April 20, 2020, saw traders unloading positions ahead of the May contract’s expiration on Tuesday, April 21, 2020.
YEN.com.gh understands that presently, buyers are being paid to take delivery as there is cost associated with transportation and storage.
READ ALSO: COVID-19 leads to 8% fall in oil prices; fears expressed over possible shutdown for months
Per a report by Yahoo Finance, the June contract was trading lower by 18 percent at $20.43 a barrel.
The International Energy Administration (IEA) has projected that demand for crude oil is likely to fall by 29 million barrels per day in April 2020.
This is because several countries all over the world have issued “stay-at-home” orders to reduce the spread of the coronavirus.
This has led to less economic activities and consequently, weaker demand for crude oil and its by-products such as gasoline and jet fuel.
The IEA reports that inventories have increased by 48% to about 55 million barrels and the capacity of storage tanks in Cushing, Oklahoma, a key U.S. oil hub, has a maximum capacity of 76 million barrels.
YEN.com.gh earlier reported that some oil and gas producers have revealed plans of cutting spending after crude oil prices experienced a downturn.
Oil markets have been negatively affected following a push by Saudi Arabia and Russia to increase output.
The international benchmark prices have been reduced by more than half to well below $30 a barrel since 2020 started.
READ ALSO: Oil price falls as COVID-19 forces Saudi Arabia to start a price war
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