US oil prices turned negative for the first time on record on Monday after oil producers ran out of space to store the oversupply of crude as a result of the COVID-19 pandemic. A historic market collapse was triggered which left oil traders reeling and forced producers into paying to dispose of their excess.
Oil producers have continued to pump near-record levels of crude into the global market, even as analysts warned that the impact of the pandemic would drive demand to its lowest levels since 1995. The emergence of negative prices is expected to prompt some oil companies to hasten the shutdown of their rigs and wells to avoid plunging deeper into debt or bankruptcy.
With oil prices at such a low level we wonder whether the major oil companies globally will be able to maintain their current dividend policy? Another blow for income seeking investors.