Monday was the worst day ever for US benchmark crude West Texas Intermediate (WTI). Crude oil prices witnessed the biggest drop in history. WTI futures reached an all-time low of $ -0.40 per barrel on Monday. This was due to the huge reduction in demand for crude oil.
Reduction in demand for oil due to Corona crisis
The world is currently battling the Corona virus epidemic. Lockdowns are announced in different parts of the world to avoid corona. Factories are closed due to lockdown and traffic facilities are also closed. Therefore, due to the decrease in the consumption of oil around the world, the demand for crude oil has also come down drastically.
Lack of oil storage in America
In fact, the United States has in a way exceeded its reserves of crude oil. The storage facilities there have reached their full capacity. According to Chris M., chief analyst at S-and-P Global Platts, all crude oil tanks will be filled within three weeks. In such a situation, it is necessary to clear the existing reserves for oil production.