Coronavirus sends WTI crude oil futures to negative price for first time
Pump jacks draw crude oil from the Long Beach Oil Field in Signal Hill, California, March 9, 2020. (AFP Photo)


The May contract price for West Texas International (WTI) fell below zero for the first time late Monday as the coronavirus pandemic continues to hammer the oil industry.

WTI crude oil for May delivery fell more than 100% to settle at negative $37.63 per barrel.

WTI was hit particularly hard as its main U.S. storage facilities in Cushing, Oklahoma were filling up, with Trifecta Consultants analyst Sukrit Vijayakar saying refineries were not processing crude fast enough.

There are also plenty of supplies from the Middle East with no buyers as "freight costs are high", he told AFP.

Earlier on the same day, the U.S. benchmark crude oil price sank to its lowest level ever, falling below $1 a barrel amid the coronavirus pandemic's hit to demand and an epic supply glut.

The steep decline was driven by investors closing out their positions ahead of the May contract expiry on Tuesday. Investors left holding the contracts will have to take physical delivery of the contracts as storage is quickly becoming an issue.

Traders are becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.

Analysts said this month's agreement between OPEC and its peers to slash output by 10 million barrels a day was having little impact because of the virus lockdowns and travel restrictions that are keeping billions of people at home.