Oil prices crash to lowest ever as coronavirus wipes out demand

20 April 2020, 19:32 | Updated: 1 September 2020, 10:22

Crude oil has fallen to its lowest value since records began
Crude oil has fallen to its lowest value since records began. Picture: PA

By Kate Buck

US crude oil prices have crashed to their lowest value in history as coronavirus continues to dominate the financial market.

According to CNN barrel prices fell bellow $0 on Monday - meaning some producers have actually been paying their clients to take the product off their hands.

In short, the lack of demand for crude oil means supplies haven't been used up - meaning there's nowhere for an incoming supply to go.

Oil manufacturers had already agreed to implement record cuts in their production in the hope of balancing their supplies with demand, but it does not seem to have been enough.

Much of the plunge has been 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.

For all the latest news on coronavirus, follow our live blog

Oil storage units are full after demand plummeted due to stay at home orders, so the demand has now tailed off
Oil storage units are full after demand plummeted due to stay at home orders, so the demand has now tailed off. Picture: PA

Benchmark US crude oil for June delivery fell 12.9% to 21.69 dollars per barrel, as factories and car around the world remain idle.

"Basically, bears are out for blood," analyst Naeem Aslam of Avatrade said in a report. "The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut."

Halliburton swung between gains and sharp losses, even though it reported stronger results for the first three months of 2020 than analysts expected.

The oilfield engineering company said the pandemic has created so much turmoil in the industry that it "cannot reasonably estimate" how long the hit will last. It expects a further decline in revenue and profitability for the rest of 2020, particularly in North America.

Listen & subscribe: Global Player | Apple Podcasts | Google Podcasts | Spotify

Brent crude, the international standard, was down 1.78 dollars to 26.30 per barrel. Big oil-producing countries have agreed to cut production to help balance supplies with demand, but many analysts say the cuts are not sharp enough to lift prices.

In the stock market, the mild drops ate into some of the big gains made since late March, driven lately by investors looking ahead to parts of the economy possibly reopening as infections level off in hard-hit areas. Pessimists have called the rally overdone, pointing to the severe economic pain sweeping the world and continued uncertainty about how long it will last.

In Tokyo the Nikkei 225 fell 1.1% after Japan reported that its exports fell nearly 12% in March from a year earlier as the pandemic hammered demand in its two biggest markets, the US and China.

The Hang Seng index in Hong Kong lost 0.2%, and South Korea's Kospi fell 0.8%.

European markets were modestly higher The German Dax was up 0.5%, the French Cac 40 rose 0.7%, and the FTSE 100 in London gained 0.7%.

Latest World News

See more Latest World News

The woman was hit on Avenue Charles-de-Gaulle, in Beaune, France

British woman, 35, is run down and killed in front of her husband while out jogging in France

Russia hit Ukraine with over 700 drones overnight. Picture: Alamy

Russia launches largest drone attack on Ukraine since start of full-scale invasion

Builder, 35, revealed as trespasser sucked into jet engine at Milan airport

Builder, 35, revealed as trespasser sucked into jet engine at Milan airport

A video posted by Kaitlyn Carpenter on Facebook shows a house being washed down a river, with the caption reading: 'A house got taken down the river!!! Please please please be safe everyone!!!'.

Father and two children washed away in 'life-threatening' flash floods in New Mexico

In the northern districts of Marseille (16th arrondissement, above L'Estaque), residents and emergency workers attempt to contain the last remaining flames following a major wildfire that caused significant damage.

More than 100 injured as wildfire rages at the 'gates of Marseille'

Firefighters from Ciudad Acuna, Mexico, left, aid in search and rescue efforts near the Guadalupe River days after a flash flood swept through the area, Monday, July 7, 2025, in Ingram, Texas.

More than 160 still missing in Texas flash flooding aftermath as 109 confirmed dead, state governor says

A 2023 image of a cargo ship seized by Houthi rebels.

Houthi rebels celebrate sinking ship packed with explosives in Red Sea

Former Israeli Prime Minister Ehud Olmert

Former Israeli PM tells LBC he doubts the Nobel committee will take Netanyahu's Trump peace prize nomination seriously

Women gather to vote at Tortank girls school polling station in Lashkar Gah, Helmand Province, Afghanistan, despite the Taliban mounting various rocket and IED attacks in the city killing at least one person.

Taliban leaders wanted for abuse of women

People look on near the Plage des Corbieres, on the outskirts of Marseille, southern France on July 8, 2025

Residents urged to stay indoors and flights grounded as major wildfire rages at the 'gates of Marseille'

The crash site where Liverpool FC player Diogo Jota and his brother André Silva lost their lives, showing the wreckage of the Lamborghini Huracan.

Diogo Jota was ‘behind the wheel of Lamborghini and driving at high excess of speed,’ say Spanish police

Bruno tracked down nine people, including missing children and people with Alzheimer's, according to Italian media.

'Hero' sniffer dog Bruno killed by sausages filled with nails

More than 200 children are being treated in hospital with lead poisoning in China after school chefs used inedible paint to decorate their food. Picture: Getty

More than 200 children poisoned with lead in China after consuming food decoration

Volcanic materials spewing from Mount Lewotobi Laki-Laki at East Flores regency in East Nusa Tenggara, Indonesia.

Indonesian volcano erupts as flights cancelled and gas masks sent to local people to help with 'painful' breathing

Milan Bergamo Airport has suspended all flights following the incident

Horror as ‘man ingested into plane’s engine’ at Milan airport

A fitness influencer said she has been left 'disfigured' following an attack by intruders. Picture: Snapchat

Fitness influencer left 'disfigured' after being sprayed with bleach and assaulted in vile attack