U.S. oil futures traded in a negative range on Tuesday, after nearly $ 40 in the previous session plunged into their first ever drop below zero levels, as fears of running out of storage space in the sector increased due to oversupply due to the Corona virus.
Brent crude fell world record in response to the collapse in demand after a decline in economic activity.
US West Texas Intermediate (WTI) crude for May delivery was trading at -2.58 dollars a barrel by 0807 GMT, up $ 35.05 from Monday's close when the contract settled at -37.63 dollars a barrel.
The US recession was exaggerated by the expiration late Tuesday of the first month's oil delivery contract in May while storage shortages are particularly severe. June's most active contract fell to $ 11.88 a barrel.
On the other hand, Brent crude, the world benchmark for June delivery, fell to $ 18 a barrel.
Movement restrictions to try to contain the new coronavirus have reduced oil demand by an estimated 30%, resulting in a large surplus of crude oil that needs to be stored.
The main warehouse hub in Cushing, Oklahoma, the delivery point for the US West Texas Intermediate contract, is expected to be full within weeks.
In order to boost the profits of the American oil industry, US President Donald Trump said on Monday that his administration will consider stopping imports of Saudi crude oil.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, a group known as OPEC +, agreed this month to cut production by 9.7 million barrels per day. However, this reduction will not take place before May, and it is not sufficient to restore the market balance.
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