US stocks tumble as Dow Jones drops over 500 points at opening bell

Wall Street is facing another rough day with the main US stock indices down sharply on Tuesday. The fall occurred as oil prices continued to get crushed amid fears that crude storage tanks are running out of space.

The Dow Jones Industrial Average dropped more than 500 points or two percent after the opening bell. The Nasdaq Composite was down around 150 points or nearly two percent, while the S&P 500 index was losing around 1.7 percent.

The losses come amid a historic collapse of the price for US crude benchmark West Texas Intermediate (WTI), with May futures contract prices closing at -$37.63 per barrel in value on Monday. While the price for the contract jumped on Tuesday and briefly traded above zero, it then fell again to -$5 per barrel.

International benchmark Brent was not spared by the market turmoil, plunging to the lowest level since 2001 on Tuesday. Brent futures for June delivery were trading below $20 a barrel.

The epic decline in crude prices amid the global coronavirus lockdown also hit stocks in Europe and Asia on Tuesday. Both Japan’s Nikkei and Hong Kong’s Hang Seng dropped around two percent, while the Shanghai Composite in mainland China tumbled nearly one percent. In Europe, the British FTSE sank more than two percent during afternoon trading, while the main indices in Frankfurt and Paris fell by more than three percent.

Market volatility remains intense as the number of coronavirus infections is still rising worldwide, with the US facing the highest number of cases. The pandemic has crippled demand for oil as travel has been almost fully halted and many production facilities remain closed. 

The lack of demand for the commodity left some of it stranded on tankers at sea, while most onshore storage tanks are nearly at capacity. “One of the problems we have in the US is that everything is full,” Mike Cantrell, who is co-chair and board member of Oklahoma Energy Producers Alliance and chairman of Postwood Energy LLC, told RT. He added that one of the world’s largest storage facilities in Cushing, Oklahoma could run out of space in two or three weeks.

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