After eking out small gains at the start of the week, the is heading lower on Tuesday as risk off mode returns. Amid concerns over the health of North Korea’s leader Kim Jong-Un and the unprecedented move in the markets, not even an upbeat report has been able to stop the bears.
Paying to sell oil
The price on some futures contracts on WTI traded in negative territory for the first time in history overnight as the global oil glut has become so large that there is no longer space left to store the oil. The market panicked and the fell to an unprecedented historic low of $-37.63 overnight. No one was willing to buy oil contracts that expire today, and those who were willing to buy and store were rewarded.
What is happening should shock the oil producers into acting in a more meaningful way to shore up the price of oil. Despite the COVID-19 lockdown, oil producers continued pumping oil regardless of the growing glut. The planned OPEC cuts aren’t set to kick in until 8th May….