U.S. oil price turns negative for first time in history

The price of Brent crude oil fell below 23 a barrel

Oil rises on news of production cuts

With scarcity to store crude oil, the United States benchmark West Texas Intermediate for May delivery ended trading at -$37.63.

Oil markets have plunged in recent weeks as lockdowns and travel restrictions to fight the coronavirus around the world batter demand.

Oil extended gains in Asian trade Friday on signs that producers are already cutting output and rising US-Iran tensions, recovering from unprecedented lows triggered by the coronavirus pandemic.

A Diesel pump is pictured at a gasoline station in Muelheim on the Ruhr, Germany, on Sunday.

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Under a deal agreed between the Organization of the Petroleum Exporting Counties and other producers including Russian Federation and Azerbaijan, a grouping known as OPEC+, output cuts of 9.7 million barrels bpd should take effect from May.

"The decline in more liquid futures contracts reflects the broader problem we have in the oil market - severe oversupply in 2Q", said Staunovo.

There were also signs U.S. output is beginning to fall - the Energy Information Administration said American crude production fell slightly to 12.2 million barrels per day last week.

USA oil prices crashed to the negative territory for the first time in history on Monday, fueled by pandemic-related demand shock and oversupply fears.

"The storm for oil isn't over but at least for the time being it is less volatile than the headline-grabbing moves of the last few days", notes Carlo Alberto De Casa, chief analyst at ActivTrades, but added that in the long-term he sees the need for further production cuts from the Organization of Petroleum Exporting Countries (OPEC) and others.

There are also plenty of supplies from the Middle East with no buyers as "freight costs are high", he said.

"With storage facilities filling up fast, particularly at the WTI pricing point, Cushing, there are fears that there will be nowhere to store it". Keep comments relevant to the article. Final decision will be at the discretion of the Taipei Times.

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