US Oil Prices Drop to Negative as Demand Shrinks
Because storage capacity could be full in May, oil producers are paying buyers as much as $37.41 to take barrels of oil off their hands; they've been as desperate as to rent tankers to store oil. This is due to a drop in demand from the global oil market, worldwide shelter in place/lockdown means little oil is burned in cars, planes, trucks, trains, and ships. Additionally, storing oil has become more expensive than selling it, as the world is running out of storage locations. If oil prices continue to be this low, nearly 500 companies will have to file for bankruptcy in the coming months. Oil prices have never been negative before, but have been dangerously low in the past. In 2008, the recession diminished energy demand, decreasing oil prices, and this was a short term situation. Leading exporters have agreed to slash production in order to cope with the situation, but even though the market is in shambles right now, a resurgence in demand once businesses are opened and life returns to normal will bring the industry back to where it was before the virus.
1. How has coronavirus affected oil prices?
2. How will this dip in oil prices motivate governments to move quicker toward renewable energy?
3. How will turmoil in the oil industry affect governments' decision to give bailouts to failing companies?





