Oil prices in the US have dropped into negative territory due to collapse in demand amid the coronavirus pandemic.
Traders were being paid more than $40 (£32) to buy a barrel of oil on Monday. It is the first time in history oil prices in the US have been in negative territory.
Oil traders usually buy the right to collect 1,000 barrels at a specific date – but sell it on later, preferably for a higher price – before they have to pick up the oil.
Whoever owns the contract when it expires is obliged to take delivery of the barrel.
With the deadline for May contracts due to expire on Tuesday, traders scrambled to offload their barrels, to ensure they were not left to pick up oil which they do not have the ability to collect.
It meant they were willing to pay a lot of money to anyone willing to take the oil off their hands, while it is also expensive for producers to shut down production, so they were willing to pay a premium for people to take the oil they extract.
Stocks were also slipping on Wall Street in afternoon trading, but the market’s most dramatic action was by far in oil.
International demand has dropped significantly in recent weeks, while Saudi Arabia ramped up production after a falling out with Russia.
Although Saudi Arabia and the rest of oil producing cartel Opec has now committed to slashing production again, the cuts have yet to make an impact on a market flooded by oil.
Many of the world’s oil storage sites are full and unable to take any more, so final buyers are nearly impossible to find.
“No one wants oil now. But it’s also fair to assume that with demand not able to recover and the US unable to agree on output curbs we will also see the June contract come in sharply to the mid-teens also,” said Neil Wilson, chief market analyst at Markets.com