Coronavirus: The oil market's six-week plunge

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New York, Opec, Russia, Saudi Arabia, oil, coronavirus, Covid-19
A 3D-printed oil pump jack is seen in front of a displayed stock graph and "$0 Barrel" words in this illustration picture, April 20, 2020.

London, United Kingdom - A look back at a tumultuous period for black gold after U.S. crude oil futures collapse below $0 for the first time in history.


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Published: Tue 21 Apr 2020, 2:48 AM

Last updated: Tue 21 Apr 2020, 4:58 AM

Oil prices fell into negative territory in New York trading on Monday for the first time ever, with the coronavirus pandemic slashing demand and creating a supply glut.
Here we look back at a tumultuous six-week period for black gold.

- March 5 -

At the start of a two-day meeting of the Opec oil-producing nations and their "Opec+" partners including Russia, the price of crude falls below $50 dollars a barrel for the first time since 2017. 
For comparison, it reached a record $145 a barrel in 2008.

- March 6 -

The price of oil drops by 10 per cent after the Opec talks break up without agreement, Russia refusing to reduce their oil output in order to boost the market.

- March 9 - 

Markets plunge 20 per cent, nearing $30 a barrel after Saudi Arabia announced it was cutting its oil price. The move triggers a price war with Russia, with the two oil-producing giants seeking to grow their share of the global market.

- March 30 -

The price of oil on the US and London markets continues to fall to levels unseen since 2002, with the US benchmark West Texas Intermediate price dipping below $20 dollars a barrel.

- April 2 -

The crude price rebounds by a historic 25 per cent after US President Donald Trump hints that Riyadh and Moscow plan to end their price war with a sharp reduction in output.

- April 3 -

Prices rise another 10 per cent on optimism that an end to the price war is imminent.

- April 9 -

The WTI rises nine per cent to $22 per barrel after Opec and its allies reach agreement to reduce production by 10 million barrels per day. However there is nothing Opec+ can do to halt the drop in demand caused by the COVID-19 pandemic.

- April 20 -

A journey into the unknown for the oil market. The value of a barrel of oil plummets to below zero as investors and speculators seek to offload into a market so saturated that storage capacity is running out, with no reprieve in sight due to weak demand.
The price for WTI for May delivery ends trading at -$37.63 a barrel ahead of Tuesday's close for futures contracts -- when traders who buy and sell the commodity for profit would have had to take physical possession of it.
"It's a contract for something that nobody wants to buy," said Matt Smith of ClipperData.

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