London — US crude prices plunged to their lowest level in history on Monday as traders continue to fret over a slump in demand due to the coronavirus pandemic. Starting at an already record low of below $5 late on Monday, the future contract prices started trading in the negative within the hour. US benchmark WTI oil price closed at -$37.63/barrel.

On Monday, a technical oddity exacerbated the price plunge as traders fled the May futures contract ahead of its expiration tomorrow [Tuesday]. The following month’s contract [June] fell 11 per cent to under $22.22 a barrel, Gulfnews writes.

The severe drop on Monday was driven in part by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on Tuesday. Traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.

June prices for WTI were also down, but trading at above $20 per barrel. Meanwhile, Brent Crude – the benchmark used by Europe and the rest of the world – was also weaker, down more than 7% at about $26 a barrel.

The oil industry has been struggling with both tumbling demand and in-fighting among producers about reducing output, BBC writes.

Earlier this month, Opec members and its allies finally agreed a record deal to slash global output by about 10%. The deal was the largest cut in oil production ever to have been agreed.