It’s been a year since U.S. benchmark West Texas Intermediate crude futures made history by trading and settling in negative territory, and while prices have recovered to trade above pre-COVID 19 levels, that day won’t be soon forgotten.
“Last year proved that we hadn’t seen it all in the oil world,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in emailed commentary on Monday. “Many failed to see the gravity of what was coming,” including oil producers, the Organization of the Petroleum Exporting Countries and their allies, governments and analysts.
On April 20, 2020, the front-month May 2020 WTI crude contract dropped 306%, or $55.90, for the session, to settle at negative $37.63 a barrel on the New York Mercantile Exchange.
The one-day plunge was the largest based on records going back to 1983, and the settlement was the lowest on record, according to Dow Jones Market Data, marking the first and only time a contract closed with a negative value. Read more…..
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