Damascus-Sana
An unprecedented historic collapse in the global oil markets yesterday with the price of US oil futures falling below zero and turning into negative in light of the outbreak of the Corona virus emerging and the American administration is failing to confront it.
The price of futures contracts for US crude oil collapsed in trading yesterday, bringing the price of a barrel to less than negative $ 37, for the first time since the start of selling these contracts in 1983 after the excess of the volume of pumping increased compared to the demand for oil, which became almost non-existent due to the state of the general closure in all Around the world, quarantine measures are in place to reduce the outbreak of the Coronavirus.
The state of the historical collapse in US oil prices and its transformation into a negative means that oil producers are paying buyers to get rid of their commodity and the responsibility of storing it for fear of running out of storage capacity in May after the decline in demand for crude due to the spread of the Corona virus and the resulting economic paralysis status around the world led to US oil depots near full.
Experts confirmed that the measures taken by the governments of the world to confront the Corona virus, including the ban on travel and quarantine in homes, made the demand for oil almost stop to drop the price of a barrel to unprecedented levels in which the cost of manufacturing, shipping and storing it is not covered, and this is what led companies to hire tankers to store the surplus. For display in the markets, which forced the price of US oil to enter the negative zone and led to a drop in the price of the West Texas Intermediate barrel, which is the US oil index, to the lowest level at $ 37.63 a barrel.
The state of confusion that hit the oil markets after the collapse of the US oil price had direct repercussions on US stocks, which in turn fell, ending the Dow Jones Industrial Average trading session on the Wall Street, down by 2.44 percent, and the broader Standard & Poor's 500 Index retreated by 1.79 percent.
While the expectations of a major economic recession seem to turn into a reality, some experts believe that the agreement of members of OPEC and its allies earlier this month to reduce global oil production by 10 percent did not achieve the desired results and the reductions were not significant to make a difference.
The collapse of the American oil prices threatens dozens of companies with bankruptcy, and according to Politico Magazine, Washington does not have many tools or options to address this problem and raise oil prices to the level required to maintain the energy industry.
With the losses incurred by the Americans due to the Corona virus and the Trump administration's failure to deal with it, the collapse of oil prices and the difficulties that Washington will face in trying to restore stability to the energy sector will add a new dimension to the catastrophic repercussions resulting from the Corona virus and the state of confusion in the United States in the face of two health and economic crises .