Date Published: April 21, 2020
On Monday April 20, 2020, the price of U.S. oil dropped into the negative for the first time in history, likely a result of decreased consumer demand as the lockdown has kept people inside, as well as trader’s fears for surpassing storage capacity in the months to come. The oil industry has been struggling with both tumbling consumer demand and in-fighting among oil producers about reducing output. Earlier this month, OPEC (Organization of Petroleum Exporting Countries) members agreed to cut global production by about 10%, which represents the largest cut in oil production ever. However, experts predict that this extraordinary action is still not enough to balance oil markets in the near future. U.S. President, Donald Trump, has stated that the government will continue to buy oil for the country’s national reserve; however, these storage facilities are also at risk of reaching capacity.
Summary by: Sophia Duong