U.S. oil futures continued to trade in negative territory on Tuesday, after closing down nearly $40 on Monday in their first-ever sub-zero dive, as concerns grew the United States will run out of storage for a glut caused by the coronavirus lockdown.
Global benchmark Brent crude also fell sharply in response to the collapse of demand following reduced economic activity.
U.S. West Texas Intermediate (WTI) crude for May delivery (CLc1) traded at minus $7 a barrel by 0955 GMT, up to $30.63 from Monday’s close when the contract settled at a discount of $37.63 a barrel.
The slump in the U.S. contract was exaggerated by the looming expiry late on Tuesday of the front-month contract for the delivery of oil in May when the lack of storage is set to be particularly acute.
Global benchmark Brent crude for June delivery was down $5.25, or 21% at $20.32 per barrel.
Restrictions on movement to try to contain the novel coronavirus have reduced oil demand by an estimated 30%, resulting in a huge surplus of crude in need of storage.
U.S. crude inventories were expected to rise by about 16.1 million barrels in the week to April 17 after posting the biggest one-week build in history, five analysts polled by Reuters found.
The American Petroleum Institute is set to release its data at 4:30 p.m. (2030 GMT) on Tuesday.
Last updated on Tue., April 21, 2020.