Oil drops below $1 a barrel; lowest level in history

U.S. crude oil prices plunged to their lowest level in history, below $1 a barrel, due to an historic slump in demand from the COVID-19 coronavirus pandemic.

Eustance Huang and Pippa Stevens for CNBC:

U.S. crude prices plunged to their lowest level in history as traders continue to fret over a slump in demand due to the coronavirus pandemic. The price of the nearest oil futures contract, which expires Tuesday, was the hardest hit, detaching from later month futures contracts with a drop of more than 90%. This suggests that some believe there could be a recovery later in the year.

“There is still a lot of crude on the water right now that is going to refineries that do not need it,” Helima Croft, global head of commodities strategy at RBC Capital, said Monday on CNBC’s “Squawk Box”. “Right now we don’t see any near-term relief for this oil market … we remain really concerned for the outlook on oil near-term,” she added.

The coronavirus pandemic has dealt a severe blow to economic activity around the globe and sapped demand for oil. While OPEC and its oil-producing allies finalized a historic agreement earlier this month to cut production by 9.7 million barrels per day beginning May 1, many argue that it still won’t be enough to counter the fall-off in demand.

MacDailyNews Take: Oil drops below $1 a barrel. Well, at least we live in interesting times.