Europe: Stocks open lower on sub-zero oil

[LONDON] European stocks opened down Tuesday after US oil prices ducked below zero overnight for the first time as the coronavirus crisis wipes out global crude demand and sparks a vast supply glut.

London's benchmark FTSE 100 index of major blue-chip companies dived 1.4 per cent to 5,728.99 points, Frankfurt's DAX erased 1.7 per cent to 10,487.41 points and the Paris CAC 40 shed 1.4 per cent to 4,463.56 compared with Monday's closing levels.

At the same time, US benchmark West Texas Intermediate for May delivery rebounded above zero on Tuesday, changing hands at US$1.67 a barrel after closing at -US$37.63 in New York.

The massive sell-off also came ahead of the expiry of the May futures contract later Tuesday.

"Ever thought that it could be imaginable to see the price of US oil valued at less than a pizza? Or even a slice of pizza? How about for it to actually cost to sell US crude?" said Jameel Ahmad, global head of currency strategy and market research at trading firm FXTM.

"All of this was previously thought to be unthinkable - but it became very real for traders as the price of US oil turned negative for the first time in history."

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AFP