Global stock markets slid and bond prices rose as traders abandoned the oil futures expiring in May, dropping the contract by 306% to lows never seen before.
“This is clear evidence of the destruction of demand,” said Michael McCarthy, chief strategist for broker CMC Markets in Sydney.
“This is not only relevant to the energy markets, this very clear evidence of economic damage is very likely to dampen the sentiment.
Futures in May were minus $ 37.63 per barrel. During the day, prices fell $ 55.90 a barrel and fell to $ 40.32.
The June contract for West Texas Intermediate, the US benchmark, was $ 20.43 per barrel much higher.
North Sea Brent, the international benchmark, was at $ 25.95, down 7.59% on the day.
(GRAPHIC: the historic US crude oil crash below zero – here)
On the stock markets, Japanese Nikkei futures rose 0.52% at 23:19 GMT while Australian S & P / ASX 200 futures fell 0.99% at 20:59 GMT.
The Nikkei 225 index closed up 3.15% to 19,897.26 on Monday. The futures contract is down 2.02% since this close.
The gauge of MSCI stocks around the world lost 1.15%, after sharp declines in Asia and slight increases in Europe led by the health sector.
On Wall Street, the Dow Jones Industrial Average fell 592.05 points, or 2.44%, to 23,650.44. The S&P 500 lost 51.4 points, or 1.79%, to 2,823.16. The Nasdaq Composite lost 89.41 points, or 1.03%, to 8,560.73.
Even with Monday’s drop, the S&P 500 rose 26.1% from its March low, in part due to the extreme easing of the Federal Reserve and a $ 2.3 trillion stimulus package adopted by Congress.
Yet some analysts likely underestimate the impact of the global economic deadlock on corporate profits.
The United States has by far the largest number of confirmed coronavirus cases in the world, with more than 750,000 infections and more than 40,500 deaths, according to a Reuters report.
The debate on when to lift restrictions to stem the pandemic has intensified in the United States, with protesters describing the blockades as “tyranny” and health workers and government officials describing them as a matter of life or of death.
Lawmakers in Washington were fighting over a possible $ 450 billion deal to provide more aid to small businesses and hospitals hit by the crisis. Republican Senate leader Mitch McConnell said a vote could take place on Tuesday.
President Donald Trump described the historic drop in crude prices as short-term and the result of “financial tightening”, adding that the administration would consider stopping oil shipments from Saudi Arabia to lift the market.
The dollar rose slightly, as falling crude prices put pressure on oil-related currencies.
The bond markets have suggested that investors are expecting a tough economic time ahead. The 10-year benchmarks rose for the last time in their course by 12/32 to reach 0.6179%, against 0.656% late Friday, against 1.91% at the start of the year.
Sales pressure on Italian government bonds has returned over the past week, canceling out some of the benefits of the European Central Bank’s massive bond buying program after eurozone politicians failed accepted the issuance of joint debt as a way of coping with the crisis.
Meanwhile, Italian Prime Minister Guiseppe Conte on Monday reiterated calls to the EU to issue joint eurozone bonds to demonstrate the bloc’s solidarity.
Reporting by Katanga Johnson in Washington and Herb Lash in New York; Editing by Sam Holmes
Our standards:Principles of the Thomson Reuters Trust.