US oil prices recover a day after trading below $0 for the first time ever

Crude oil prices in United States reached $10.01 on April 22, a day after plummeting into negative territory. According to reports, negative surge in US crude oil prices was due to a technical blip, however, it signals a drop in demand as body wants to store oil. On April 21, futures of US benchmark contract West Texas Intermediate for delivery in May reached -$37.63 a barrel, which was its lowest in history, but prices picked up on Wednesday catapulting it to $10.01 a barrel. 

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demand for crude oil fell drastically because of coronavirus pandemic as it has forced many countries to go into a complete lockdown and put a ban on travel as well as on movement of people. Factories and or oil-based facilities have been shut in many of se countries where lockdown is in place to contain spre of virus. 

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On April 20, US President Donald Trump h said in a press conference that his ministration was considering cutting oil imports from Saudi Arabia in order to save domestic industry, which is currently facing risk of bankruptcy. As per reports, Trump was briefed about a plan by Republican lawmakers wanting him to block oil shipments from coming into United States through an executive order. Trump told reporters he would look into proposal. 

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Oil price war

Crude oil prices dropped to its lowest in February this year after two of biggest exporter Saudi Arabia and Russia failed to reach an agreement on production cuts. collapse in oil prices threatened US' domestic industry following which Donald Trump urged both parties to reach a resolution. Russia and Saudi Arabia are yet to reach an agreement on production cuts but until n both countries will continue to flood world market with crude oil as y can afford it. 

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(Im Credit: AP)