- For the first time in history,US crude oil price goes negative.
- Despite,earlier this week,there was an output cut agreement between OPEC & its counterparts to stabilize the crude oil prices.
- Covid-19 pandemic has hit the crude oil industry,globally.
In a historic event,US crude oil prices have gone negative for the first time.This continuous drop in the prices were because of the pandemic Covid-19 has hit the world economy.
At the New York Mercantile Exchange,West Texas Intermediate crude have lowered their contract rates up to 300% to settle at -37.63 USD per barrel.
Simply putting this up,Sellers are paying buyers to buy the stock because the storage capacities of the sellers may run out in near future.Covid-19 pandemic have resulted in the reduction of crude oil sales,globally and it is building the pressure on the sellers of the crude oil to manage their stocks.There are reports that sellers have to hire extra oil tankers to store an ever increasing stock.
Earlier this week,there was an agreement for the output cut between the Organisation Of Petroleum Exporting Countries (OPEC) and its allies.Despite of this agreement,there was such an exponential decline in the US crude oil prices.This agreement was done presuming that it will stabilize the decline in prices.
In India,its impact will be negligible because of the fact that maximum quantity of crude oil we buy is mainly from the gulf.Further,there is also a decline in Crude oil prices of the gulf,it may,though,affect the Indian economy in a positive way.
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