US crude prices plunged to their lowest level in history on Monday as traders continue to fret over a slump in demand due to the coronavirus pandemic.
Starting at an already record low of below $5, the future contract prices started trading in the negative within the hour.
U.S. crude oil futures fall below $0 for the first time in history pic.twitter.com/MG0hlwkHkB
— Reuters (@Reuters) April 20, 2020
Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to slow the spread of the novel coronavirus.
The May U.S. WTI contract fell $19.06, or 104.3%, to a discount of 79 cents a barrel after touching an all-time low of -$1.43 a barrel. Brent was down $1.85, or 6.6%, at $26.23 a barrel.
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.
Investors bailed out of the May contract ahead of expiry later on Monday because of lack of demand for the actual oil. When a futures contract expires, traders must decide whether to take delivery of the oil or roll their positions into another futures contract for a later month.