On Monday, the oil prices went negative after the historic 1986 still, don’t expect that you will get paid on filling up your tank.
Some new conditions were noted that caused oil prices to go below $0 price which appeared for the first time in history. Mainly, the prices of crude oil only impacts the retail charges of a gasoline gallon.
This massive fall in the gasoline consumption of the US took place because of the lockdown orders followed by the outbreak, in the recent weeks. The widespread of COVID-19 has dragged down the prices of both; gasoline and oil. The fact that we have excess supply of both of the resources is demanding more space to get stocked. With limited and less space to secure them, prices went negative.
As of Monday, the average price headed at $1.81 of a gas gallon, in accordance with AAA. The prices started to have an impact by the worldwide lockdown since the stay at home orders were initially made. The gas is now observed cheaper than a dollar however, it is not less than $0. The negative prices that appeared on Monday, were because of some surprising changes in the oil market.
On the other side, the contract of June only dropped only by $10 making $22 per barrel. The world benchmark i.e. the Brent crude, got pushed down only by 5% making 26.50 per barrel. Though ups and downs usually appear every month, a big negative fall never appears usually. Besides, crude oil isn’t the best prediction element of the retail price of gasoline.
The wholesale prices of gasoline are the great predictors of determining the price to set up for the gas stations. This incident is actually near to the twice of the charge being traded the previous week.