After epic crash, US oil prices rebound back in positive territory

Washington, Apr 21: The US oil prices rebounded above zero on Tuesday, a day after futures ended in negative territory for the first time. US benchmark West Texas Intermediate for May delivery traded at $0.56 a barrel after closing at $37.63 in New York.

On Monday, the US benchmark crude oil price collapsed, falling to one cent a barrel amid an epic supply glut caused largely by the coronavirus pandemic's hit to demand.

But the market's most dramatic action was in oil, where benchmark U.S. crude for May delivery plummeted to a record low below $1.50 per barrel, a 90 per cent drop in just one day.

Much of the plunge was chalked up to technical reasons - the May delivery contract is close to expiring so it was seeing less trading volume, which can exacerbate swings.

But prices for deliveries even further into the future, which were seeing larger trading volumes, also plunged.

Demand for oil has collapsed so much due to the coronavirus pandemic that facilities for storing crude are nearly full. Benchmark US crude oil for June delivery fell 12.9 per cent to USD 21.69 per barrel, as factories and automobiles around the world remain idled. Big oil producers have announced cutbacks in production in hopes of better balancing supplies with demand, but many analysts say it's not enough.