Historic Day: Oil prices fall below $0 a barrel as demands collapse

US crude oil prices plunged to a record low in history today (Monday) as the market continues to be roiled by an epic collapse in demand due to coronavirus pandemic.

Starting at an already record low of below $5 late, the futures contract prices started trading in the negative within the hour.

The May US West Texas Intermediate (WTI) contract fell $19.06, or 104.3 per cent, to a discount of 79 cents a barrel at 2:09 pm Eastern Time, after touching an all-time low of -$1.43 a barrel. Brent was down $1.85, or 6.6pc, at $26.23 a barrel.

The May delivery contract is close to expiring so it was seeing less trading volume, which can exacerbate swings. However, prices for deliveries even further into the future, which were seeing larger trading volumes, also plunged.

The June WTI contract is trading more actively at a much higher level of $21.6 a barrel. The spread between May and June was more than $23, the widest in history for the two nearest monthly contracts.

Meanwhile, London’s FTSE 100 (UKX) and Germany’s DAX opened narrowly higher, but France’s CAC 40 was slightly negative.

Europe’s tepid open followed an uneasy day in Asia, where Japan’s Nikkei 225 closed down nearly 1.2 percent.

Hong Kong’s Hang Seng Index ended down 0.2 percent, while China’s Shanghai Composite closed 0.5 percent higher.