Oil prices drop below zero
by Lynde Langdon
Posted 4/21/20, 11:06 am
Suppliers expect to have so much crude oil on their hands next month they don’t know where they will put it all. That’s why one benchmark for the price of American oil briefly got as low as minus $37.63 on Monday. By Tuesday, it rose back above zero.
What does that mean? Don’t expect your local gas station to pay you to fill up your car. But oil suppliers might end up paying extra to store the surplus created by the historic drop in demand for fuel. People aren’t flying or driving many places during the pandemic. A common joke now is that personal vehicles are getting “three weeks to the gallon.”
Dig deeper: Forbes has an in-depth explainer of what happened to the oil futures market.
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