New Yoke April 21 — Crude oil prices plummeted to negative $35.20 per barrel on Monday.
Never in U.S. history has the price reached below zero.
Not even during the Civil War, or the Great Depression.
While this is unprecedented, it doesn’t mean it will stay this low.
The negative price was for May deliveries of West Texas Intermediate crude oil – a benchmark of oil pricing around the world.
The negative price means oil producers have no more room to store the oil.
So they are paying people to take the extra crude off their hands.
Demand for oil has dropped sharply around the world as people remain in lockdown due to the coronavirus pandemic.
Crude oil for June deliveries remains positive, holding above $20 per barrel, still a comparatively low price compared to before the pandemic.
But what does this mean for consumers at the gas pump?
Crude oil makes up 71% of the price of gasoline.
The rest is distribution costs, the producer’s profit, and taxes.
Gas is now cheaper as a result, but gas prices are less volatile than crude oil prices.
Prices have fallen for eight straight weeks, according to Gasbuddy.com.
The average price of gas in the U.S. is now $1.78 per gallon.
In two cities in the U.S. average prices were under $1 a gallon.
Traders do expect the price of crude to rebound in the coming months, but much of that will also depend on demand during the coronavirus pandemic.