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BREAKING: Oil drops below $1 a barrel



Oil drops below $1, oil market, Dow, oil price crash, a barrel

BREAKING: Oil drops below $1 a barrel

Oil drops below a $1 a barrel. The Dow plunged into the closing bell, and a historic oil price crash that sent futures below zero was only one of the market’s problems.

The Dow 30 could not ignore the devastation in the oil market, and major energy companies Exxon Mobil and Chevron took steep haircuts amid the chaos. | Source: REUTERS/Brendan McDermid

  • The Dow Jones started the week with a painful nosedive.
  • An epic collapse in the price of May’s WTI crude futures contract saw front-month oil prices go profoundly negative.
  • With a wave of job losses likely, the Dow has another big problem on its hands.

The Dow Jones nosedived on Monday as the impact of the coronavirus lockdown on crude prices caused the front-month WTI futures contract to collapse below zero and plummet as low as negative $40 per barrel ahead of expiration.

With an armada of Saudi Arabian oil on its way to the U.S., the situation is getting worse. Negative prices in North America and inevitable layoffs create another threat for a Dow that has been struggling toward recovery.

Historic Crude Demolition Batters The Dow Jones

Dow Jones, Crude Oil Negative, Stock Market
The Dow Jones plunged as the expiring May contract on U.S. crude oil futures collapsed to negative $40 bbl. Source: Yahoo Finance

All three of the major U.S. stock market indices fell to start the week:

  • The Dow plunged 545.58 points or 2.25% to 23,696.91.
  • The S&P 500 fell 1.59% to 2,828.94.
  • The Nasdaq dipped 0.76% to 8,583.71.

Stocks may be pulling back from their recent recovery, but the price of oil was the big talking point on Wall Street today as expiring U.S. crude futures careened into negative territory.

u.s. oil price crashes below zero
A historic contango pushed U.S. crude oil prices into negative territory. | Source: Yahoo Finance

With analysts and strategists scrambling to find a reason for the vast sell-off, it is apparent that something structural is afoot. A massive long-squeeze coupled with scarce storage capacity led traders and funds to dump May’s expiring oil futures at any price.

Front-month WTI crude futures fell as low as negative $40.32 before recovering to negative $35.39 for a daily loss of 293%.

All was not well in the June contract either, which fell 12% but held above $22 bbl.


The impact of falling oil demand on the U.S. economy is evident. Job losses are already rampant in the energy sector, and these will continue until the supply-demand curve stabilizes.

A whopping 11% drop in the rig count last week is strong evidence of this, and when you combine that with the services industry carnage, the headwinds for the Dow Jones increase once again.

Joshua Mahony, a senior market analyst at IG, notes that the pressure on prices is the direct result of inventory piling up around the world – but especially in North America.

He writes that this is “unlikely to go away anytime soon”:

Oil prices have hit a 20-year low this morning, with a clear distinction between US crude and Brent crude forming as stockpiles fill up. With a huge surplus in crude products filling inventories on land, there is a clear benefit to those producers whom are able to put their oil out to sea.

Unfortunately, the lack of demand and landlocked nature of production in the US and Canada has already started to provide negative prices across a number of crude products in North America. With the insufficient OPEC+ production cut of 9.7m bpd only kicking in at the start of May, the huge oversupply issue looks unlikely to go away anytime soon.

Part of the problem for the market’s oversupply issue is that a colossal wave of Saudi Arabian oil is heading to North America. In response to this, Canadian Edmonton Mixed Sweet crude fell slightly below zero, highlighting how desperately short inventory space is getting throughout the continent.

The fact that the U.S. and Europe are gradually plotting their exit from the coronavirus shutdown does not appear to be changing the near-term demand outlook. Air travel is miles away from normalcy, even after travel restrictions are eventually reduced.

” alt=”” aria-hidden=”true” />Japan, Stock Market, Dow Jones, Oil Price
The travel industry won’t snap back to “normal” when lockdowns end. | Source: Andreas Steno Larsen via Twitter

Given that the United States is the largest oil producer in the world, the impact on the U.S. stock market has been markedly subdued.

But Wall Street cannot ignore the fact that the jobless claims will continue to spike as rigs go offline.

Dow Stocks: Big Oil Struggles, Boeing Whalloped After China Cancellations

The Dow 30 could not ignore the devastation in the oil market, and major energy companies Exxon Mobil (-4.7%) and Chevron (-4.2%) took steep haircuts amid the chaos. While these industry titans both have an opportunity to consolidate power amid an impending wave of bankruptcies, there is no doubt that their dividends are at risk.

Boeing was another dead weight on the Dow Jones, falling 7% because its sacred order book has seen mounting cancellations from Chinese clients.

The grounding of the 737 MAX, as well as the capitulation of the global airline industry, are twin crises for the aerospace manufacturer. But it is not all bad news for the thousands of Boeing employees who head back to work this week in Washington.

Apple stock fell a relatively benign 1.6%. The tech sector as a whole continues to be a pillar of strength for the stock market during the pandemic.

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Labour Force

Kogi Governor Approves Implementation of N30,000 Minimum Wage for workers



Kogi Governor Approves Implementation of N30,000 Minimum Wage for workers

Kogi state governor, Yahaya Bello, has approved the implementation of N30,000 as minimum wage for the workers in the state.


The secretary to the state government, Folashade Ayoade disclosed this on Tuesday after an extensive meeting with the organized labour in Lokoja


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She blamed the delay in the implementation on the inability for the committee to meet regularly due to the covid-19 pandemic which has been overcome.


The SSG equally commended the organised labour for their understanding and patience, which she said has resulted into the signing of the implementation of the new minimum wage.

Read Also: FCTA Set to Implement Minimum Wage for FCT Workers

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CBN to End Forex Sales to Commercial Banks in 2022



Author: Eunice Johnson, Abuja 

The Central Bank of Nigeria (CBN) has put Deposit Money Banks (DMBs) on notice that it will stop selling forex to them by the end of 2022. CBN Governor Godwin Emefiele made this known in Abuja on Thursday at the end of the Bankers’ Committee Meeting where he also introduced the RT200 Programme.




Emefiele said the time had come for the banks to go out there and source for forex by funding entrepreneurs with ideas. The CBN, Emefiele said, will support the banks by granting rebates and other support until the banks find their feet in sourcing their forex by themselves.

He also disclosed that the apex bank’s policies and measures have led to a significant improvement in diaspora inflow from an average of US$6 million per week in December 2020 to an average of over US$100 million per week by January 2022. He added that the CBN would be reviewing these intervention programmes going forward to ensure that they continue to achieve the desired results.

He said international bodies, including some embassies and donor agencies, have been complicit in illegal forex transactions that have hindered the flow of foreign exchange into the country.


Read Also: CBN Encourages Nigerians to Accept E-Naira

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Customs Corner

Customs CG Deploys 37 Comptrollers as Comptroller Attah Heads Kebbi Command



Customs CG Deploys 37 Comptrollers as Comptroller Attah Heads Kebbi Command

Author: Gift Wada, Abuja

The Comptroller General of Customs Col. Hameed Ibrahim Ali (Rtd.) has approved the deployment of 37 Comptrollers to various Units, Departments and Commands across the country.

This was disclosed in a release signed on Tuesday by the Customs Deputy National, DC Timi Bomodi for the Comptroller General of Customs.

Among those deployed are the present National PRO of Customs Comptroller Joseph Attah who will assume the office of Area Controller of Kebbi Command, Comptroller AAS Oloyede who shall be moving from ICT/MOD to Tin Can Island Port Command, while Comptroller SI Bomoi to FCT Command. Other postings are Comptroller BA Jaiyeoba to Oyo/Osun Command, Comptroller A Dappa-Williams to Eastern Marine Command, Compt. MA Umar Kano/Jigawa, Compt. KC Egwuh ICT/MOD, Compt. LM Mark Enugu/Anambra/Ebonyi, Compt. T Tachio CTC Kano, Compt. AA Umar Western Marine, Compt. M Dansakwa North Eastern Marine, Compt. AC Ayalogu T & T and Compt. KD Ilesanmi will assume duty as Comptroller Board among others.


Ali in postings released on 7th of February, charged the newly posted Comptrollers to justify the confidence reposed in them by NCS Management by bringing to bear their years of experience and training in trade facilitation and anti-smuggling activities on their new assignment.


Given the enormous expectations of government regarding revenue generation in the current year, the Comptroller General reiterated the need for all Area Controllers and Unit heads to take full charge of the affairs of their Commands by ensuring absolute compliance with extant fiscal policies while leveraging on the efficient management of data to optimize trade facilitation and revenue collection.

Furthermore, the CGC directed all officers to be extremely vigilant in protecting the lives and wellbeing of Nigerians by ensuring the full fortification of our borders against the incursion of smugglers and other cross border criminals.

Read Also:

Customs Raises Concerns over Finance Act as Senate Sets N3trn Target for Revenue Agencies

Comptroller Ali Ibrahim Assumes Duty as New Customs FOU Zone ‘C’ Boss

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