Could Saudi Arabia crash the US economy?
Sellers have to pay customers money : US oil price plunges into the red
Because of the Corona crisis, the price of US crude oil has fallen to an all-time low. For the first time since futures trading began in 1983, the price of a contract that provides for physical oil delivery in May was in negative territory - most recently at minus US $ 18.20 per barrel (159 liters). This means that buyers receive money when they take delivery.
On the one hand, this shows how much supply and demand are currently diverging on the oil market. On the other hand, it is a very special phenomenon due to the May futures contract on US oil that expired this Tuesday. In such contracts, the seller undertakes to deliver a fixed amount of goods - in this case oil - at a fixed price and date.
Due to a toxic mixture of a sharply falling demand and a much too high supply, storage capacities are in danger of being exceeded in many countries. In any case, oil investors want to avoid running into a lack of storage space.
Large oil producers such as Russia and Saudi Arabia recently announced significant production cuts. However, experts doubt whether the reductions are sufficient to balance supply and demand.
In the USA in particular, oil stocks are threatened to burst at the seams. Since the end of February, stocks in the important delivery location of Cushing have risen by almost 50 percent. As a result, the purchase prices paid in the oil-rich region of Texas keep falling. In the meantime, there is even a fear that in isolated cases negative prices will soon be due for crude oil purchases if storage capacities continue to shrink.
The Dow Jones index of standard values was down 0.8 percent to 24,050 points by early Monday afternoon in New York. The broader S&P 500 lost 0.5 percent to 2,859 meters. The index of the technology exchange Nasdaq traded slightly in the plus at 8667 points.
Economic life is also at a standstill in the USA
Since its low in March, the S&P has made up roughly 30 percent of ground, with the market value increasing by $ 5.8 trillion. The billion dollar aid packages from governments and central banks fueled hope that the consequences of the pandemic could be limited. But the index is still 15 percent below its record high.
In order to get the corona crisis under control, economic and public life in the USA has largely come to a standstill. In the four weeks up to April 11, 22 million people in the US had to claim unemployment benefits for the first time, and analysts estimate that another five million will be added this week. Other economic barometers are also deep in the range that indicates a recession.
Hopes have recently been placed on US President Donald Trump's plans to gradually raise the economy again. But details are still open.
[Follow all new developments on the coronavirus in our live blogs on the virus worldwide and the virus in Berlin.]
The Mayor of New York, Bill de Blasio, said it will be weeks or months before the largest city in the country reopens its doors because there are not yet enough corona tests. "The recovery will be much slower than it is currently priced in because the distance rules can be relaxed, but not lifted until we have a vaccination or an effective drug," said Andrea Cicione, chief strategy officer at financial services provider TS Lombard.
The fall in the price of light US oil collapsed, the raw material cost a good two thirds less at $ 5.56 and as little as never before. That weighed on the stocks of energy companies. The stocks of the oil multinationals ExxonMobil and Chevron lost up to 2.7 percent. (dpa / Reuters)
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