Oil prices crumpled even further Tuesday, and U.S. stocks sank to their worst loss in weeks as worries swept markets worldwide about the economic carnage caused by the coronavirus pandemic.
The market’s spotlight was again on oil, where prices have plummeted because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders. Global demand is set to drop to levels last seen in the mid 1990s. At the same time, oil producers can’t slow their production fast enough, and all the extra crude means storage tanks are quickly running out of room.
The cost for a barrel of U.S. oil to be delivered in June plunged 43% to $11.57. That’s the part of the market that oil traders are focused on and trading most actively. For oil to be delivered next month, which is when storage tanks could top out, the cost of a barrel stood at $10.01. A day earlier, it fell below zero for the first time, meaning traders paid others to take oil off their hands to get rid of the headache of finding where to store it.
The S&P 500 fell 3.1% to 2,736.56. The Dow Jones Industrial Average fell 631.56 points, or 2.7%, to 23,018.88, and the Nasdaq was down 3.5%, to 8,263.23. -- AP