UPDATE from LOUISIANA - The Louisiana Mid-Continent Oil and Gas Association (LMOGA) released the following statement today in response to a historic drop in oil commodity prices.
“We anticipated the combination of unprecedented events occurring in the world today would continue impacting broader oil markets. An abundant amount of crude oil flooding into an oversupplied market, coupled with historic short-term demand drops due to stay-at-home restrictions has created a challenging time for our industry,” said LMOGA President Tyler Gray.
“However, we remain optimistic, long-term demand for oil and natural gas remains strong and our economy will need energy to recover once the COVID-19 crisis is behind us. Our industry is not the only one hurting right now, we are all in this together. We must continue to mitigate the spread of the virus, and safely stimulate the economy until demand and supply stabilizes.
NEW YORK, N.Y. — Oil prices plunged below zero on Monday as demand for energy collapses amid the coronavirus pandemic and traders didn’t want to get stuck owning crude oil with nowhere to store it.
A barrel of benchmark U.S. oil for May delivery fell more than 100%. West Texas Intermediate's price per barrel settled at about negative $37, CNBC and Fox Business report. That means producers would pay traders to take the oil off their hands.
While the foray into negative territory was largely due to technical reasons, prices for other oil contracts also plummeted as storage facilities for crude come close to hitting their limits.
The S&P 500 was down 0.9%, giving up some of its big gains following its first back-to-back weekly gain since February.
Other stocks were mixed midday after Wall Street trimmed its sharp losses from earlier in the morning.
The S&P 500 started Monday with a drop of 1.6%, but it trimmed that down to 0.3% shortly before noon, Eastern time.
The Dow industrials were also down, but the Nasdaq composite was up slightly.
More buoyant gains for Netflix, Amazon and other stay-at-home winners in the coronavirus pandemic helped limit the market’s losses.