Monday marked a historic moment in traditional markets, with the price of West Texas Intermediate oil futures going into negative territory for the first time ever.
Contracts for May delivery, expiring on Tuesday, collapsed below -$40 per barrel at one point. In other words, sellers were willing to pay as much as $40 to people to take a barrel off their hands. Excess supply in the midst of a massive global downturn has led to a storage problem for crude. Some traders are even making $2 offers per barrel on the spot market.
The breathtaking crash in oil prices was taken as a warning sign to U.S. stocks and bonds: a recovery, where demand for energy would put those stockpiled barrels to use, appears to be further in the distance than anticipated. The S&P 500 index slipped 1.7 percent while safe-haven U.S. Treasury bonds saw an influx of dollars that pushed two-year yields down to 5 percent. Bond yields fall as prices rise.
Gold also gained on the day. On Monday, the precious metal climbed 0.86 percent to $1,713.40 per troy ounce.
Oil also took its toll on the FTSE 100 index toward the end of its trading day Monday. Though the British equity index closed up less than a percent, it started off with strong gains but started to tumble in afternoon trading on concerns about the energy sector.
Several hour earlier in Asia, the Nikkei 225 slipped 1.15 percent. The dip arrives as Japan’s Ministry of Finance reported poor trade numbers, with exports declining by more than 11% while imports dropped by 5% in March.
Bitcoin prices merely shrugged at the turmoil in the oil markets, slipping 4.4 percent over the past 24 hours, according to CoinDesk’s Bitcoin Price Index as of 21:35 UTC (5:35 p.m. EDT) Monday.
The price for 1 BTC fell below its 10-day and 50-day moving averages at 11:00 UTC (7 a.m. EDT), with…