Small businesses aren't the only ones taking a hit from stay-at-home orders. Lockdowns are a contributor to the oil price gyrations you're currently seeing. Here's what it means for you.
Demand for oil has plummeted since the coronavirus pandemic, as people stay home under lockdown orders. The glut of oil is so great that room for storage is running out.
Hello, contango: The cost of Brent crude for June 2020 deliveries is around $20, but the cost for June 2021 deliveries is $36.18, according to CME Group. The national average cost of a gallon of gas is now $1.80, more than a dollar cheaper than a year ago, AAA found. But few can take advantage under stay-at-home orders.
The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019.Stay-at-home orders aren't only hitting mom-and-pop businesses. They're also a driver behind the cratering price of oil.crude oil was $13.91 per barrel on Wednesday. The so-called WTI is the U.S. benchmark for oil prices.– is now $20.28 per barrel for June deliveries. Both WTI and Brent are down by roughly 70% year to date.
"Very simply, 3.6 billion people around the world right now are covered by lockdowns," said Pavel Molchanov, an energy analyst at Raymond James. "We estimate that a fifth of the world's normal level of oil demand is currently offline because of the lockdowns and economic and travel disruptions."
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