As US crude oil prices hit NEGATIVE first time in history, developing countries like Pakistan are expected to benefit from the situation.
Pakistan’s Foreign Minister Shah Mahmood Qureshi told a news channel on Monday evening that the latest situation vis-à-vis the oil prices would benefit Pakistan to “some extent”. He said nobody would have thought that coronavirus would bring the world to the point where it stands today. He said that crash of the international oil market was shocking.
Economist Dr Shahid Hassan said that coronavirus made the international oil market crash and this crash would benefit Pakistan hugely. He said that now the government should provide maximum relief to people. He said that now oil should be sold in the Pakistani market at the international rate.
However, economist Khurram Shahzad said that crash of the US crude oil market would not benefit Pakistan because Pakistan imports oil from the Middle East. He however said the government could decrease the petrol prices in Pakistan up to Rs24 per litre.
US oil prices turned negative Monday for the first time ever as the great oil crash of 2020 took a bizarre turn. Crude finished at -$37.63 a barrel, marking the only time it has gone below zero since oil futures began trading on NYMEX in 1983.
The historic collapse shows just how terribly oversupplied the oil market has become. There are real fears that the world will soon run out of places to store barrels. Producers are essentially paying to get rid of their barrels. Part of the reason oil was so volatile is that trading volume was very light in the May contract, which expires Tuesday.
That low liquidity set the stage for the unusual scenario of negative prices. Although the May contract turned negative, the June contract was still trading above $20 a barrel. Brent crude, the world benchmark, traded above $25. Crude finished at $18.27 a barrel on Friday, meaning they collapsed by more than 200% in one day.