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Oil prices and stocks rebound Wednesday after price of oil fall below zero for the first time ever

Photo Credits: OilPrice.com

Oil prices and stocks are rebounding Wednesday from a collapse in prices from waves of selling earlier in the week, according to the New York Times. On Wednesday, stocks on Wall Street and in major European markets rallied and reversed some of the large losses that had scared investors for several days. The selling earlier in the week was triggered by a fall in oil prices, and the price of one oil benchmark dipped below zero for the first time ever. Some holders were ready to pay customers to take a barrell off their hands. The prices fell because of a disappearing demand for petroleum and the fact that there are few places left to store all the crude still being pumped. ~

On Wednesday, some stability returned to the energy market. The prices of the American benchmark, the West Texas Intermediate crude, and the Brent crude (the international benchmark) were all significantly higher. Shares of companies in the energy industry, like Marathon Oil and Halliburton, were among the best performing stocks in the S&P 500. ~

According to Business Insider, some analysts think that there could be further trouble for the oil industry. Paul Sankey, the managing director of Mizuho Securities, believes that the price of the US West Texas Intermediate crude oil could fall to negative $100 per barrel by next month. “Will we hit -$100/bbl next month? Quite possibly,” Sankey wrote. “We have clearly gone to full scale day-to-day market management crisis, and as we said when we first called for negative prices, the physical reality of oil is that it is difficult to handle, volatile, potentially polluting, and actually useless without a refinery.” With this oil crisis occurring amid the Coronavirus pandemic, it remains unclear exactly what the oil industry will look like in coming days, weeks, and months. ~

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