Rachel Winter

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Negative Oil prices on Monday were a "fad," says an industry expert.

The Price for U.S. Oil - which slumped to minus $37 at one point - was a trading deadline and is now close to a positive value.

The British Oil price was also hit, but The Price for a barrel of Brent crude Oil is now at about $23.

"Yesterday, The Price action is best understood as a characteristic or feature of the futures trade," said analyst James Trafford of Fidelity International .

He believes that the unprecedented price-confirmed motion, that the short-term, demand is very weak.

"But it is not catastrophic," He Said . "We see no negative Oil prices as a new normal going forward. "

Oil prices have severely weakened due to a combination of oversupply and a collapse in global demand due to The Decline in economic activity in the cased of coronavirus-lockdown measures.

What Happened ?

The Price of Oil , we see, is reported, indeed, The Future price of Oil . Futures are essentially contracts for The Delivery of the physical goods at a later date.

So, if we look at Oil prices, we see actually how The Market price for future months.

As of the date of delivery approaches, these orders must be moved to the subsequent period.

The Price of a barrel of West Texas Intermediate (WTI), the benchmark for U.S. Oil fell into negative territory for the First Time in history on Monday.

But only in connection with the may contract falling into the was.

the dealer with The Contract , have not been able to find a buyer because No One wanted to with The Ability to delivery take.

"No One wants to month the supply of Oil next, because it is save nowhere to put it, so The Price fell Below Zero ," said Rachel Winter , associate investment director at Killik & co.

this means that Oil prices will fall further?

"Oil prices and the shares in the sector remains largely weak over the near term," predicted James Trafford.

He Said the supply cuts recently agreed upon by the Opec group of Oil -producing economies were not likely to be sufficient to balance The Market in the foreseeable future.

Opec is assumed to be that seeking to cut Oil output immediately, instead of waiting until next month, the pressure to ease on The Price .

"the nature of The dislocation experienced on Monday, but a lot of some may downplay it, points to a fundamental problem in the Oil markets, namely a lack of storage capacity and the demand," said Neil Wilson , senior market analyst at markets. com.

"But it also shows The Market that try to do their work, forcing The Price down enough to shut down the production. "

Artur Baluszynski, head of research at Henderson Rowe, agreed that the effect was only temporary, but warned of the impact.

"on Monday, While the negative WTI futures price, maybe a one-off glitch, does it confirm there will be trouble," He Said .

"The Covid-19 crisis is the destruction of the global demand for energy, and without a timeline beyond The End of the block in the developed world, The Market suffers from chronic oversupply. "

oil, coronavirus lockdown measures, coronavirus pandemic, global economy, oil & gas industry, opec

Source of news: bbc.com