This last week, two previously unthinkable things happened.
Oil prices fell to below zero, with a futures contract for West Texas crude falling to minus $37.63 a barrel. The oil sector has been severely hit by the corona pandemic and wrangling within OPEC, with prices having dropped by 90% since the beginning of the year. There is an unprecedented glut of oil in the global market at the moment, with ‘refiners rejecting barrels at a historic pace and with US storage levels sprinting to the brim,” according to Michael Tran, managing director of global energy strategy, RBC Capital Markets.
There have been thousands of job losses across the global oil sector and millions wiped off company values around the world. Traders in Asia are finding it increasingly difficult to get credit as fears rise around the likelihood of defaults.