(21 April 2020)DAILY MARKET BRIEF 1:Submerged

<p>The US crude turned negative for the first time in history and traded as low as $-40 per barrel on Monday. This is because the global oil glut has become so large that there is no space left to store this large quantity of unexploited oil. The market is literally submerged. Hence the panic rose yesterday to an unprecedented level, as no one wanted to hold oil contracts due to expire today, therefore, rewarding investors who are ready to buy this unwanted oil, and store it.</p>
<p>Now if we look back, since the beginning of the coronavirus crisis, too proud or too greedy, oil producers kept on pumping oil regardless of the unnecessarily building stockpiles, as demand became increasingly anemic. As a result, the world’s storage capacity has been used up to near 80%. Today, each extra barrel adds to the already massive global glut, contributing to the buildup of colossal stockpiles that find no buyers. The result is dramatic for oil producers.</p>