Coronavirus has led to many situations that history had never seen before. Amidst all the chaos, the absolute downfall of the Oil prices that have now reached $0 is one of them. Since the traders are in desperate need of a solution and the economy is hit awfully, people were left with no choice but to lower the oil prices to $0 which is thoroughly shocking.
The downfall in the oil prices has been consistent since the global pandemic started in 2019. Finally, after 25 years in history, oil prices are down to negative which is a great blow for America. Such extreme decisions taken by the countries is a clear evidence of just how oversupplied the US oil markets are currently.
Tran addresses the problem prices widely
In an attempt to give us proper details managing director of Global Energy strategy at RBC Capital Markets, Michael Tran stated, ‘There is little to prevent the physical market from the further acute downside path over the near term,’
‘Refiners are rejecting barrels at a historic pace prices and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former.‘
Lynch unleashes reality
During a phone interview even Michael Lynch, president of Strategic Energy & Economic Research Inc mentioned, ‘The background psychology right now is just massively bearish,’. ‘People are concerned that we are going to see so much build-up of inventory that it’s going to be very difficult to fix in the near term and there is going to be a lot distressed cargoes on the market. People are trying to get rid of the oil and there are no buyers.’