Houston Chronicle by James Osborne and Sergio Chapa April 20, 2020
The price of U.S. oil plummeted below zero Monday, as the falling demand for crude during the coronavirus pandemic sent a panic through markets that threatened to send the industry into a tailspin.
With storage tanks nearing capacity in some parts of the country, West Texas Intermediate, the U.S. benchmark, closed at negative $37 a barrel, down 300 percent on the day, with buyers in effect paying producers not to deliver their oil.
The quick dive in prices, already far below the worst of the milestone 1986 oil bust that transformed Houston and the oil business in Texas, shocked an industry that is accustomed to booms and busts.
“This will cause a lot of people to shut in (their wells). At these prices, there’s no way,†said Larry Olmstead, an oil and gas investor in Midland, referring to producers who would likely turn off production. “It reminds me of the ’80s in a way, but this thing is worse. Incredible, absolutely incredible.â€
The panic surrounded oil under contract for delivery in May, for which Tuesday is the last day to sell. With buyers running out of space to store crude, they steadily pushed down oil prices on the New York Mercantile Exchange until the cost per barrel turned negative Monday afternoon.
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https://www.houstonchronicle.com/business/article/Oil-crashes-to-11-a-barrel-as-storage-fills-up-15212810.php
