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Oil Spirals Below Zero in ‘Devastating Day’ for Global Industry

  • U.S. crude futures plunged below zero on Monday for first time
  • Rout will send a deflationary wave through the global economy
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Watch: Francisco Blanch, head of global commodities at Bank of America Merrill Lynch, discusses the factors behind the crash in oil prices.(Source: Bloomberg)
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The day started like any other gloomy Monday in the oil market’s worst crisis in a generation. It ended with prices falling below zero, thrusting markets into a parallel universe where traders were willing to pay $40 a barrel just to get somebody to take crude off their hands.

The move was so violent and shocking that many traders struggled to explain it. They grasped wildly at possible causes all day long -- had some big firm got caught wrong-footed? Or were inexperienced retail investors flummoxed by a market quirk? -- but had no tangible evidence of anything to point to.