A global shock – crude oil has hit rock bottom as storage struggles to contain glut. On Monday, US oil prices had taken a nosedive to a negative territory of US$0 to a lowest–US$37.63 per barrel. Further aggravating the situation is the oil storage at risk of reaching full to over capacity, especially in the main US oil hub in Cushing, Oklahoma. The situation may also reckon North American producers to pay consumers to take their excess crude.
The oil crisis begins from when the pandemic has dampened demand for oil from major markets like China, and triggering spat between Russia and Saudi Arabia to shore up oil prices by cutting oil production (See related news http://www.eog-asia.com/saudi-to-raise-oil-production-further-by-april-russia-may-follow-suit/).
The price slightly recovered on Tuesday (April 21), as the May contract traded back to positive territory at US$1.10. Traders are also looking ahead on the contract for June delivery, which had higher trading volumes.