Oil’s plunge in April was of historic proportion, falling below $0 per barrel for the first time ever in history. The collapse in U.S. oil prices, as tracked by WTI, fell as storage for crude oil became nearly completely unavailable worldwide.
The economy may have an indirect boost with the price of gasoline expected to drop to new lows as the price of crude oil (WTI) collapsed to below $10 per barrel in April.
Lower crude oil prices have historically led to lower gasoline prices nationwide as product costs have dropped exponentially. Some states such as California and Hawaii may not see the full benefits of lower oil prices due to additional excise state taxes, refining costs, and distribution expenses.
Storage for crude oil has become increasingly scarce as the virus outbreak has led to a growing supply amid falling global demand, thus creating a glut of oil with minimal potential buyers.
Source: Department of Energy
Disclaimer: The information published herein is provided for informational purposes only, and does not constitute an offer, solicitation or recommendation to sell or an offer to buy securities, investment products or investment advisory services. All information, views, opinions and estimates are subject to change or correction without notice. Nothing contained herein constitutes financial, legal, tax, or other advice. The appropriateness of an investment or strategy will depend on an investor’s circumstances and objectives. Please consult your Advisor about what is best for you.