US crude oil benchmark prices have fallen into negative territory for the first time ever.
According to Bloomberg Commodities, the current price of West Texas Intermediate is US-$23.05 per barrel.
Demand for oil has collapsed amid a worldwide lockdown as countries try to contain the covid19 pandemic.
Added to that, a glut on the market and a price war between Russia and Saudi Arabia have put pressure on prices, even as both countries agreed to cut production.
The US is also facing a storage crisis as it runs out of capacity to store production. The US is the world’s biggest producer of oil.
Trinidad and Tobago’s budget is based on WTI prices but most of its crude is sold based on Brent prices (the international benchmark). Brent crude is current US$25.63. This country’s oil typical sells for prices somewhere between Brent and WTI. In a message to Newsday, Heritage Petroleum Co Ltd chair Michael Quamina said: “We are very fortunate to be in the unique position of having strong cash reserves, which will enable us to store what we produce, and hopefully wait out, as best as possible, what we can only hope to be a short to medium term crisis in the market.”
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