Oil continues unprecedented sell-off: June futures drop 30%, but May contract turns positive
West Texas Intermediate crude futures for May delivery pared losses to trade in positive territory on Tuesday, one day after plunging below zero for the first time in history. The contract expires today, which means that thin trading volume has contributed to the wild price action.
The massive selling gripping the oil market is now spreading to more futures contracts, worrying investors about the deep economic damage being done by the coronavirus shutdowns.
The contract for June delivery, which is the more actively traded and therefore a better indication of how Wall Street views the price of oil, slipped 30% to $14.43 per barrel. The contract for July delivery fell roughly 11% to $23.42.
The May contract last traded at $5.00 per barrel after previously trading in negative territory, which means sellers would effectively pay buyers to take the oil off their hands. On Monday it fell below zero for the first time in history. However, as contracts approach expiration, trading volume is typically thin.