ISLAMABAD: US Oil price down from Zero into Negative territory for the first time in History. Crude Oil was trading at -40$ per barrel.
This crisis happened because of the lowest ever demand of Oil amid of Coronavirus Lockdown in major Cities of the World.
Furthermore, all the Storage capacities of oil fills are full now and production companies offering buying to take it off their hands.
West Texas Intermediate, the US Benchmark, traded as low as -40.32 per barrel in a day of chaos in Oil Market. On Friday, the settled price was 18.27 $ per Barrel but of Monday it turned into -37.63$ per Barrel to as low as -40$ per barrel. The America’s main delivery point of Cushing, Oklahoma just crossed the storage capacity-, reaching to its full limit.
US President reacted to this chaotic situation saying that “We’re filling up our National petroleum reserves, the strategic reserves, and we’re looking to put as much as 75M Barrels into the reserves themselves that would top it out”.
“We’re going to either ask for permission to buy it, or we’ll store it, one way or the other, it will fill”, said Mr. Trump in a daily news conference.
Donald Trump plan is to build a Federally- controlled strategic petroleum reserve to store the excess oil which cannot find a private storage capacity
However, Congress opposed the President plan and rejected to fund Federal Purchases when White house first proposed the idea several weeks ago.
US President Donald Trump had aimed for some form of shale oil industry bailout in the $2 trillion virus relief package signed into law last week. But a provision for $3bn in government funding to help out the shale patch by purchasing supplies to replenish US strategic oil reserves was jettisoned by Democrats.
This is the First Post Coronavirus Shock that hit the World Oil Market and it is expected to cost a severe damage to Oil producing Companies and nations specially Gulf region and the United States of America where it is expected that oil producing companies could go into bankruptcy resulting in huge job lose.
According to The Wall Street Journal, Saudi Arabia and other OPEC members are considering cutting their oil output as soon as possible, rather than waiting until next month when the group’s recent production agreement with the U.S. and Russia is set to begin.
Read More: US-Saudi Oil Clash Sets Stage for Future Epic Battle
