Less than zero: The great US oil crash
Hours later and the WTI slumped further to minus $40 a barrel in a historic low, sparking quips that anyone with a swimming pool to spare might rent it out as storage to make a few extra bucks.
It has been an unprecedented and devastating three weeks for oil producers in North America, which has seen this month dubbed "Black April" with many companies expected to drown in the current vortex in oil prices.
The reasons for the alarming price crash are manifold, but the most fundamental factor is there's too much oil in the market due to over-production and under-demand.
After a mild winter that hit demand, Saudi Arabia and the UAE flooded the market with oil after Russia refused production cuts, causing prices to crash.
Oil storage facilities - particularly in the US - are now brimming over. Producers swamped in debt are pumping out more oil hoping that some day, soon, the market will pick up.
The negative price tag of oil means that they would essentially pay for barrels to be taken off their hands. Although prices have picked up since Monday, most analysts expect more dark days for US oil.
The coronavirus epidemic forcing more than half the world's population to stay behind doors means that the prospect of a jump in demand - which shale oil producers need to survive - is growing dim.
"It might not end, this is a very tough time which will effect the energy landscape of these countries," said Dr. Laurent Lambert, Professor of Public Policy at Doha Institute for Graduate Studies.
"The smallest and weakest oil companies, including all the oil service companies, will go bankrupt and dozens of thousands of jobs are being destroyed."
Lambert said the hope is that a combination of mergers and acquisitions will take place in the industry that allow some shale producers to survive. Prime US oil fields will continue pumping, even at a lower rate, Lambert adds.
"Texas will remain an oil state, even if the shale industry is unlikely to remain the bold industry that US President Donald Trump used to boast about," he said.
Although some travel restrictions in some parts of Asia and Europe are being eased, there are concerns about a second wave of coronavirus infections and signs of a global economic depression.
Rauf Mammadov, Resident Scholar at the Middle East Institute, said that the WTI price crash – while other indexes such as Brent Crude stayed stable - highlights the very different dynamics of the US oil industry, chiefly logistics and storage issues, compared to other markets.
|The reasons for the alarming price crash are manifold, but the most fundamental factor is there's too much oil in the market due to over-production and under-demand|
"WTI price plummeting is indicative of the American oil industry's chronic infrastructure problems. Inland production and lack of immediate access to world oceans have deprived the American industry of the ability to store the produced oil in tankers as other producers do," Mammadov told The New Arab.
"The ability of American industry to resurrect from its ashes will depend on several factors, both abroad and domestic. The most important factor will be the lifting of the lockdown both domestically and globally."
New shale oil producers in Canada and the US have contributed to the relatively low oil prices of recent years, with Saudi Arabia viewing them as competitors to its traditional dominance of the market.
A historic ten percent cut in production by OPEC+ will not remedy the unprecedented drop in demand and huge glut in the market.
Despite Riyadh calling for stability in the market, Mammadov said that Saudi Arabia shipped more than 1.4 million barrels to the US in the first two weeks of April even through the country was flooded with oil.
"We are yet to see the financial outcomes of this marketing policy, but political repercussions are already here," he said.
Calls for President Donald Trump to slap tariffs on Saudi oil imports coincide with growing anger among US Senators about the volatile path taken by Crown Prince Mohammed bin Salman. This includes the murder of US-based journalist Jamal Khashoggi, the blockade of Qatar, and the growing civilian death toll in Yemen.
Congress has signalled its unease by voting to end military assistance to Saudi Arabia in its war in Yemen and blocking arms sales to the Gulf state. Both of these were vetoed by Trump, who has close personal relations with Mohammed bin Salman.
On Tuesday, Trump pledged to not allow the US oil industry to crash and will face more pressure to double down on Saudi Arabia before American oil producers are crushed by the oversupply.
|Calls for President Donald Trump to slap tariffs on Saudi oil imports coincide with growing anger among US Senators about the volatile path taken by Crown Prince Mohammed bin Salman|
"Now, we see the oil champions, i.e. the congressmen and senators from oil-producing states, leading a protest against Saudi Arabia for causing the disruptions in the market," Mammadov said.
Saudi Arabia is also been urged to implement the OPEC cuts earlier than the 1 May and go beyond the 10 million barrels initially pledged, which is seen as too little too late to save US producers.
Although the low US oil prices are not expected to be a direct domino effect on Gulf states, smaller producers - such as Oman - could be hit.
Brent Crude - the other main oil index used by traders - also crashed to a 21-year low on Wednesday, but has stayed in the black due to lower transport costs than US oil, among other factors.
|Read more: Oil price truce: The Russia-Saudi standoff is over.
But at what cost?
"It is not expected to generate a domino effect, but the world's energy market is constituted of sub-markets which interact with one another," said Lambert.
At historic lows, American oil could compete with other markets, either directly or indirectly, Lambert said, while the world's biggest economy is unlikely to need any imports with storage facilities at capacity.
"Oman and other GCC countries export essentially towards Asia where the energy prices have not crashed, but where most strategic reserves are close to full and where the demand is low due to the general confinement in many countries and the anaemic industrial demand due to the global recession which started this month according to the International Monetary Fund," Lambert added.
Mammadov believes it's difficult to distinguish the impact of US oil prices on the global market due to the impact of the coronavirus pandemic.
"It is rather a global economic crisis. However, the petrostates are likely to be negatively impacted due to their dependency on oil revenues. In a short-term perspective, these countries may be able to shield their economies from the negative consequences of the crisis thanks to their sovereign wealth funds," he said.
With high-government spending, Gulf states will have to dip into wealth funds or tap into debt to survive the coming months and possibly years of low oil prices.
Non-oil growth will also be hit hard by the lockdown and slowdown in economic activity. It means that even if US oil producers are hit by low oil prices, there will be victims of the economic turmoil in Saudi Arabia and other Gulf states.
Paul McLoughlin is a news editor at The New Arab.
Follow him on Twitter: @PaullMcLoughlin