Coronavirus Update: Oil Prices Drastically Drop Due to Pandemic

The price for crude oil dropped to an historic low on Monday due to the economic fallout of the coronavirus pandemic. According to a report by CNBC, the price of West Texas Intermediate crude oil dropped below negative 190 percent — its lowest price in history. Economists expect a big upheaval all over the world as the commodity falls out of demand.

Many people are concerned about the fate of crude oil, and its performance in the global economy. According to Marketwatch, the May contract for the U.S. oil benchmark will close at the end of trading on Tuesday, and right now it is valued at less than $0 per barrel. With less travel going on all over the world, all forms of transportation fuel are falling out of demand, and buyers along the supply chain do not want to purchase more crude oil, nor store it. Investors may even need to pay buyers to store the oil, experts theorize.

"It's like trying to explain something that is unprecedented and seemingly unreal!" wrote oil markets analyst Louise Dickson in an email to colleagues at Marketwatch. "The most simple explanation for negative oil prices is that midstream players are now paying ‘buyers’ to take oil volumes away as the physical storage limit will be reached. And they are paying top dollar!"

Other experts felt the same, sharing their incredulity on TV and in articles on Monday. Mad Money host Jim Cramer said that the ripple effects of this plunge in oil prices will likely be felt for a long time to come. He also said that no one in the economic ecosystem will benefit from this drop.

"There really is no place to put the oil, and no one's stopping to produce. And it's funny: There's no upside," he said. "No one's talking about the good news of it, and I think that's because no one's going anywhere to take advantage of it, so to speak. And you watch the airline stocks go down. That used to be something that moved up. So, almost everything that happens is viewed as negative in the physical commodity world."

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The price drop will undoubtedly have a negative impact on the global economy at many, many levels, but on social media, some people looked on the bright side, noting that it will have a positive impact on the environment. Some environmental advocates even expressed their hope that this would spur widespread use of renewable technologies, including solar, wind and hydroelectrical power.

For the latest information on the coronavirus pandemic, visit the CDC's website.