Owing to the fall in demand, oil storage tanks at a major energy center in Oklahoma are close to the brim, forcing traders to pay others to take delivery of the oil owing to decline in oil prices.

Oil’s volatile crash deepened, and stocks worldwide plummeted on Tuesday as the economic chaos caused by the coronavirus pandemic turned upside down markets.

A day after oil futures first fell below zero, traders in one corner of the United States crude market were already close to paying others out of their pockets for taking off their hands. That is a market quirk created by a surplus of oil that has traders running out of places in the near term to store it.

Oil prices remain above zero elsewhere in the world and for further deliveries into the future, which analysts see as closer to the “true” crude price. A global economy affected by the virus outbreak doesn’t have to consume as much fuel as it does, on Tuesday, they slid on the same eventual concern. Airplanes are abandoned, vehicles are garaged and factories idle every week, with millions of employees losing their jobs.

The collapsing oil market continued to pull stocks into their second straight day of decline, and the S&P 500 fell 3.2 percent at 11:40 a.m. Eastern time after similar declines across Europe and Asia.

The Dow Jones Industrial Average plunged to 22,965 points, or 2.9%, and the Nasdaq fell 3.9%, respectively. The losses were rising as the day progressed, and were widespread. All except a dozen of the 500 S&P 500 companies were down.

Treasury yields dropped lower in another indication of the fear over markets. The yield on the 10-year Treasury dropped from 0.62% late Monday to 0.54%, suggesting investors are able to get paid even less to get the protection of buying a U.S. government bond. When world markets shut down to combat the spread of the virus at the beginning of the year, investors were paying about 1.90% to buy a 10-year Treasury.

Even with all the uncertainty on the oil markets, some indications of economic growth on the horizon were poking through anywhere else. The Democratic leader of the Senate said negotiators have reached agreement on major elements of a budget of nearly $500 billion to provide more loans and assistance to small businesses and hospitals. Meanwhile, Georgia’s governor announced rules allowing gyms, hair salons and other businesses to reopen as early as Friday, late Monday.

Positivity

Rising hope among some investors that parts of the economy will rebound as rates of infections have recently helped stocks recover, and the S&P 500 has risen more than 20 percent since reaching a low at the end of March. After the Federal Reserve and Congress pledged large quantities of economic assistance the rally got its start.

But the data that comes in on the economy in here and now remains grim, including a survey on Tuesday according to which the steepest fall in US sales of formerly occupied homes since 2015. Pessimists say the recovery on the market was overdone, and that a premature reopening of the economy will only lead to further infection flare-ups.

Companies often explain the hit on the part of oil prices they are taking on profits as a result of the outbreak, with many withdrawing their financial estimates for the year given all the uncertainty over how long this recession will last.

Coca-Cola stated on Tuesday that its revenues were on track to meet financial targets through February, but that all switched as stay-at-home orders in March became widespread. It said it’s optimistic the second half of the year will bring about change. IBM removed its guidance for the results for 2020 at the end of Monday and said it would reassess them at the end of June.

Tumble Recovery to Last a Long

Perhaps the most visible economic suffering is in the oil market. A barrel of US oil to be supplied in May was minus $1.48 just before stocks began trading in New York on Tuesday. In wild morning trade it bounced back over zero to $5.38. It had closed on negative $37.63 a day before.

Because of the fall in demand, oil storage tanks at a major energy center in Oklahoma are close to the brim. That has traders willing to pay others to have the oil delivered in May, as long as they also take the responsibility of finding out where to put it.

Prices for oil to be supplied later in the summer are higher, as demand will likely be heavier as the lockdowns rise. Yet even there it is flagging hope.

In June, a barrel of U.S. oil for delivery fell to $12.89, from $7.55, or 3%. The international oil standard, Brent crude, fell 23.3% to $19.61 per barrel.

Stephen Innes of AxiCorp said, “We could merely be in the eye of the hurricane as the epicenters of its rage remain centered around demand devastation and crude oil oversupply.”

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