Monday, September 26, 2022

Oil prices reach historic low, Canadian benchmark for crude plummets

U.S. crude prices on the May contract have dropped below zero for the first time in history.

The price for oil has entered uncharted territory as it dropped to negative $1.43, down 106% on the May contract.

The extreme drop is because of oversupply caused by plummeting demand that pushes storage facilities to their limits.

Western Canadian Select (WCS), the benchmark for oilsands crude, was below zero at one point, but recovered to around $8 a barrel Monday afternoon.

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Several oil companies are slashing spending as more oil builds up in storage.

OPEC reached a deal to cut production a few days ago, however that’s not set to kick in until May. Storage facilities across North America are now nearing capacity.

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