Stocks and oil prices around the world have plummeted due to the effect of the ongoing pandemic on the global economy. The prices of oil have gone down as very few people are flying or driving and most factories have shut down amid the stay at home orders. Oil producers are unable to slow their production down in time and the extra oil is going into storage.
In the US, the cost of a barrel of oil dropped by 43 percent to 1.57 dollars. Earlier, it fell below zero meaning that traders paid others to take the oil off their hands to avoid the headache of finding a place to store it.
"I don't think there's enough time even before the June contract to solve the storage capacity issue, so you see the June contract coming down sharply," said David Joy, chief market strategist at Ameriprise Financial.
"I don't know if that persists into July and beyond, but at the very least, we're going to be faced even at that time with a dramatic mismatch between supply and demand."
Even though the oil market is in chaos, some signs of economic activity on the horizon were poking through.
"It looks like we're bending the infection curve, there are signs of economic reopening and the stimulus is there," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
"All of which are good signs for the markets where there's a potential scenario where the economy starts to recover."