Oil prices plunge as coronavirus keeps people home

Oil prices plunged into negative territory Monday as the global coronavirus pandemic keeps people at home and destroys demand for transportation fuel.

The price of U.S. benchmark crude to be delivered in May fell below zero - a historic low - as storage capacity reaches its limit. That means sellers are paying buyers to take the commodity off their hands.

"So we've had oil demand collapse. People are driving less. No one's flying anywhere. So we have a lot of extra oil supply that's simply not being used," said Jim Burkhard, an oil industry analyst with IHS Markit.

Because of the coronavirus and efforts to limit its spread, major cities around the world have been on lockdown, flights have been sharply curtailed and millions of people are working from home, leading to far fewer commuters on the roads.

But pumps are still running, extracting oil from the ground, and all that oil has to go somewhere. And with far fewer people consuming it, it's getting hard to find a place to put the oil.

"If it's not being used, it has to go into storage. But there is a limit to how much oil the world can store and we're bumping up against the limits of storage capacity. And so today we saw the price of oil go negative," Burkhard said.

Cheap oil leads to cheaper prices at the pump, which are often viewed as a boon for consumers, but few people can benefit when they're sheltering at home, Burkhard said.

"It's difficult for anyone to take advantage of these lower gasoline prices if they're not driving. So there's no winner in this situation today," Burkhard said.

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death.