With few places to store oil, a May futures contract for West Texas Intermediate crude went negative.
 | MON, APR 20, 2020 | | | | DOW | | NAME | LAST | CHG | %CHG | | XOM | 41.18 | -2.04 | -4.72% | | MSFT | 175.06 | -3.54 | -1.98% | | BA | 143.61 | -10.39 | -6.75% | |
| | S&P 500 | | NAME | LAST | CHG | %CHG | | GE | 6.51 | -0.33 | -4.82% | | OXY | 12.59 | -1.04 | -7.63% | | BAC | 22.50 | -0.78 | -3.35% | |
| | NASDAQ | | NAME | LAST | CHG | %CHG | | AMD | 56.97 | +0.37 | +0.65% | | AAL | 11.06 | -0.51 | -4.41% | | UAL | 27.79 | -1.29 | -4.44% | |
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If you have a swimming pool that you haven't filled for the coming summer, maybe you could lease it out to someone holding a May futures contract for oil delivery. There are not many places left to store oil. Fewer consumers are burning fuel amid the coronavirus pandemic, but producers haven't sufficiently curbed production. The May contract for West Texas Intermediate crude, which expires tomorrow, could not be given away. Prices fell to zero and then actually went negative, which means producers have to pay to have someone take their oil. It was a bizarre move that unnerved the market.  Stocks fell sharply on the news. Oil company shares, however, did not collapse with the May contract. The Energy Select Sector SPDR Fund, which holds oil giants including Chevron, Exxon Mobil and ConocoPhillips, was down about 3%. It's bad, but it may not be quite as bad as it sounds, CNBC's Pippa Stevens writes. June and July contracts for WTI were still trading in the $20s, an indication that investors expect better months ahead for the deeply battered oil industry. Given the uncertainty of when stay-at-home orders may lift, however, oil companies will likely have to respond with deeper production cuts. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world. |
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