Crude oil prices for May traded as low as -$40.32 per barrel today (as of 3:45 pm EST Monday, April 20th), the lowest oil prices have been in US history. This is not a typo – prices are actually in the negative which means producers are paying buyers to get rid of oil.
Earlier this year Saudi Arabia significantly increased oil production in response to Russia’s refusal to curb output. That, along with the significant decrease in demand for oil due to the Coronavirus outbreak and subsequent shutdown of countries, has caused oil inventories to swell dramatically prompting concerns that there is not enough space to store any more crude oil.
Gasoline and heating oil futures are also down, but not by anything close to what we are seeing in the oil markets. Natural gas prices, however, have moved up in response. This is an unprecedented pricing phenomena and we will continue to follow this story. We have been evaluating the potential long-term impact the fall will have and will provide more detailed updates as needed.