The price of the United States crude oil benchmark turned negative on Monday for the first time in history, falling more than $50 a barrel within a day to close at $37.63 below zero, Reuters reported. This means that sellers were ready to pay buyers to get rid of their supplies as the global lockdowns to contain the Covid-19 pandemic have crushed demand, making producers fear that their storage capacity will run out.

The West Texas Intermediate crude for delivery in the month of May crashed more than 300% on Monday, deep into negative territory, touching –$40.32 (or Rs 3,100 below zero) before clawing back to settle at –$37.63 a barrel. Brent crude, the international benchmark, also slumped by $2.51, or 9%, to settle at $25.57 a barrel. Prices rebounded back above zero on Tuesday.

One barrel of oil is the same as about 159 litres.

However, the May-delivery futures contracts were the only ones that went into negative zone as they were due to expire on Tuesday. The June WTI contract traded more actively and settled at a much higher level of $20.43 a barrel. The spread between May and June futures at one point widened to $60.76, the widest in history for two nearest monthly contracts.

Physical demand for crude oil has dried up, creating a global supply glut as governments took unprecedented measures to restrict the movement of people around the world.

Meanwhile, President Donald Trump said that the US would take advantage of the historic drop in oil prices to replenish its national stockpile, AFP reported. “We are filling up our national petroleum reserves... You know, the strategic reserves,” Trump said at a press conference. “And we are looking to put as much as 75 million barrels into the reserves themselves.” Trump clarified that he would only buy that amount if the Congress authorised the funding.

Demand for oil is collapsing, and despite a deal by Saudi Arabia, Russia and other nations to cut production, the world is running out of places to put all the oil the industry keeps pumping out – about 100 million barrels a day. The United Nations Energy Information Administration said last week that storage at Cushing, Oklahoma, the heart of the US pipeline network, was about 72% full as of April 10.

Analysts warn that crude storage will fill to the brim by next month as a record 160 million barrels of crude oil is sitting in storage tankers around the world. US crude stockpiles at Cushing rose 9% in the week to April 17, totaling around 61 million barrels, market analysts said, citing a Monday report from Genscape.