This archive report was first published on 21 April 2020.
On April 20, 2020, US oil prices suffered a historic collapse, ending in negative territory for the first time as the coronavirus pandemic ravaged global demand for crude.
However, the following day, US oil prices rebounded above zero, with the May delivery of West Texas Intermediate (WTI) changing hands at $1.67 a barrel after closing at -$37.63 in New York.
The massive sell-off on April 20, 2020, was triggered by the expiry of the May futures contract, as traders desperately sought to find buyers to take physical possession of the oil.
But with storage facilities full and buyers hard to come by, the price collapse indicated that traders were paying to have crude taken off their hands.
Traders are now more focused on the contract for June delivery, which had trading volumes more than 60 times higher and rebounded to over $21 a barrel.
Brent crude, the international benchmark, was changing hands at $25.40 a barrel for June delivery, down 0.16 percent.
Analysts warn that even if prices claw back the losses, the market will likely remain hobbled by weak demand and oversupply.
“The underlying causes for that sell-off, a giant global supply glut and nowhere to store, remain the same,” OANDA senior market analyst Jeffrey Halley told AFP.
