Crude oil futures collapsed to below zero for the first time in history on Monday as the deepening concerns about the economic damage being done by coronavirus shutdowns left traders desperate to avoid taking delivery of physical crude. West Texas Intermediate crude for May delivery finished down $55.90 on Monday, more than 306%, to settle deeply in negative territory at -$37.63 a barrel on the New York Mercantile Exchange, meaning that you have to pay to get someone to take barrels of oil off your hands amid a growing supply glut and storage shortage. The May contract expires at Tuesday's close. Any traders that are still long crude at that time must take physical delivery, while anyone short must make delivery.
In the morning of Asian trading hours on Tuesday, the price of the May WTI contract bounced into positive territory, trading at $1.35 per barrel. The June U.S. crude contract gained 3.23% to $21.09 per barrel. International benchmark Brent crude futures, on the other hand, dipped 0.9% to $25.34 per barrel.
The North Korean leader Kim Jong-Un is in grave danger after undergoing surgery, according to reports. North Korea's supreme leader recently missed the birthday celebration of his grandfather - the national founder, Kim Il Sung on April 15, sparking speculations about his health. The last time Kim was seen publicly, he was presiding over a meeting of the ruling Workers' Party's politburo on April 11.
Almost all ASX sectors declined, with shares in info tech, real estate, and industrial sectors being notable losers, with all down about 3%. The heavier financials sector was down about 1%, and materials about 1.5%. The only sector inclined was utilities, thanks to gains in AGL and APA, after APA confirmed it will be paying a 50 dividend this year. However, it did trim guidance from between A$1.66 billion and A$1.69 billion to between A$1.635 billion and A$1.655 billion.
On the corporate news front, Virgin Australia announced Tuesday that the firm has entered voluntary administration to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis. That comes as the airline sector has taken a huge beating from the coronavirus pandemic, with travel heavily restricted as authorities globally race to stem the virus' spread.
ECONOMIC NEWS: The Reserve Bank of Australia's minutes for its April meeting released earlier on Tuesday, showed the Board remained committed to supporting jobs, incomes and businesses as the country responds to the coronavirus outbreak. In the minutes, members also noted that the Australian banks were in a strong position to withstand the large economic shock from the Covid-19 outbreak and financial market volatility.
CURRENCY NEWS: The U.S. dollar index, which tracks the greenback against as basket of its peers, was last at 100.19 after an earlier low of 99.928, after news that the U.S. is monitoring information surrounding the health of North Korea's dictator. The Australian dollar changed hands at $0.6301, off levels above $0.635 seen yesterday.
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