Keyword Analysis & Research: oil futures below 0

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Frequently Asked Questions

What happens when the price of crude oil falls below zero?

At any price below zero, buyers are paid to take delivery as there are costs associated with transportation and storage. WTI closed at its lowest level since recordkeeping began in March 1983, according to Dow Jones Market Data.

What happened to the oil price in April 2020?

On Monday, April 20, 2020, the price of oil traded deep into the red falling below zero for the first time ever shocking even the most seasoned energy traders and oil executives. What happened?

Why did WTI price drop below zero?

The exchange where WTI futures trade said the contract would be allowed to price below zero. The extreme move showed just how oversupplied the U.S. oil market has become with industrial and economic activity grinding to a halt as governments around the globe extend shutdowns due to the swift spread of the coronavirus.

Why are oil prices plummeting?

Since the start of the year, oil prices have plunged after the compounding impacts of the coronavirus and a breakdown in the original OPEC+ agreement. With no end in sight, and producers around the world continuing to pump, that’s causing a fire-sale among traders who don’t have access to storage.

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