US oil trades at negative prices for first time in history

US oil futures were down below $0 a barrel, their worst level since NYMEX opened oil futures trading in 1983. Monday’s plunge comes after prices hit an 18-year low last week as markets realized that record output cuts agreed by OPEC, Russia and other producers aren’t nearly enough to offset the loss in demand.

The May US WTI contract fell $19.06, or 104.3%, to a discount of 79 cents a barrel at 2:09 p.m (1809 GMT) after touching an all-time low of -$1.43 a barrel. Brent was down $1.85, or 6.6%, at $26.23 a barrel.

The June WTI contract is trading more actively at a much higher level of $21.6 a barrel. The spread between May and June was more than $23, the widest in history for the two nearest monthly contracts.

Investors bailed out of the May contract ahead of expiry later on Monday because of lack of demand for the actual oil. When a futures contract expires, traders must decide whether to take delivery of the oil or roll their positions into another futures contract for a later month.