The demand for oil has dried up worldwide because of the lockdown measures enacted by many countries against the wuhanvirus pandemic.
And for the first time in history the price of oil in US has turned negative. The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, plummeted 305% to minus $37.63 a barrel Monday.
The drop was driven in part by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on Tuesday. The June contract was trading lower by 18 percent at $20.43 a barrel. Traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.
International Energy Administration estimate a fall in demand for oil by 29 million barrels per day this month. Inventories are ballooning and hubs are filling up. And many industry jobs are on the line.
After months of wrangling, Organization of Petroleum Exporting Countries, OPEC agreed on a deal April 12, to cut production of oil and reduce output by 20 million barrels per day beginning May 1.
President Trump said during the wuhanvirus press conference Monday, that the US intends to add 75 million barrels of oil to the nation's strategic reserve. He also said he is mulling stopping foreign oil shipments to US.