U.S. Oil Plummets Below $0 A Barrel

U.S. Oil Plummets Below $0 A Barrel

Amy Harder at Axios reports U.S. oil prices went negative Monday — meaning, companies paid to sell their oil.

How it works: Several other layers of costs, including refinement, transportation and various state taxes suggest negative gasoline prices are extremely unlikely, per Patrick De Haan, head of petroleum analysis at GasBuddy.

The big picture: The coronavirus-fueled lockdowns around the world are choking off oil demand, throwing the oil industry — which was already oversupplied before the pandemic — into historic chaos.

An equally historic production cut of the world’s biggest producers likely delayed the drop in oil prices we’re seeing today — and made it a tiny bit less worse.

Prices are likely to keep dropping, or at the very least remain very low, for the next few weeks at least given there is simply not enough places to store all of the extra oil sloshing around the world as many of us stay at home.

Under the terms of an arrangement brokered by Trump, Saudi Arabia, Russia and other countries will cut 9.7 million barrels a day beginning in May, reports the New York Times. Analysts forecast that oil consumption in April will fall by about three times that.