Oil Falls to Below $0 for First Time Ever!

12 years ago we were paying $4.25/gallon for gasoline.  We were told by analysts that oil would NEVER go below $150 per barrel.  We were at peak oil and it was only going to get worse!

Then some Republicans started saying "drill baby, drill!"  Turns out America had all sorts of oil. We now have more proven reserves than Saudi Arabia.

But now with the shut down, all sorts of people are driving to work.  School buses sit idle. Construction vehicles are sitting idle.  So the demand for oil went into the tank.

Today in the oil market the price for oil went below zero.

Of all the wild, unprecedented swings in financial markets since the coronavirus pandemic broke out, none has been more jaw-dropping than Monday’s collapse in a key segment of U.S. oil trading.

The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory — negative $37.63 per barrel. Sellers were actually paying buyers to take the stuff off their hands. The reason: With the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American energy companies have run out of room to store it. And if there’s no place to put the oil, no one wants a crude contract that is about to come due.

Underscoring just how acute the concern over the lack of storage is, the price on the futures contract due a month later settled at $20.43 per barrel. That gap between the two contracts is by far the biggest ever.

“The May crude oil contract is going out not with a whimper, but a primal scream,” said Daniel Yergin, a Pulitzer Prize-winning oil historian and vice chairman of IHS Markit Ltd.

Here;  https://www.latimes.com/business/story/2020-04-20/oil-prices-plunge-below-zero-wti-may-contract

It would sure seem that the world is being shaken.