Well, we know that globally, economic health has been decimated by the Corona virus.

Pandemic demand has really fallen off a cliff.

And so, too, with the amount of oil, the amount of energy that's needed to feel the world's factories, the supply chains that carry all against all around the world that power our businesses.

That, too, has tumbled.

The problem is, the major oil producing nations continue to churn out millions of barrels of the stuff, even though demand was clearly falling, they didn't react to that.

That has led to a glut.

And whenever you have a glut of anything, demand and demand is falling, then prices also tumble, and that is what is happening here.

Making matters worse, if you recall a couple of weeks back, there was a spat between Russia and Saudi Arabia, two of the biggest producers.

Neither side would give in, and both sides ended up producing even more oil than last week.

President Trump, in fact, rarely to his credit, did manage to step in and produce a deal, managed to get Russia and all the other major oil producing nations to agree to cut production, including the U.

S.

Because don't forget, the U.

S.

Has also become a major oil producer, too.

But the problem is, those cuts millions of barrels a day have not yet kicked in.

And what you've got now is worries that the amount of storage for all this oil that's sloshing around the system is imminently going toe run out, particularly here in the U.

S.

That has caused this major price crash today two levels below zero so effectively you'll have producers begging buyers, in fact, really in negative price territory, they will have to pay buyers to take the oil off their hands.

This is on unprecedented situation.

Oil prices always suffer during economic crises.

They always tumble.

Never before have they fallen this low.

Never before have they fallen into negative territory.

And that really underscores Kathy.

The extent off the crisis that we are in here and again.

I say this all the time and don't mean to sound negative, but there are no signs, really, that the global economy is going to pull out of this crisis any time soon.

Shiv on in Washington, D.

C.

thank you very much for joining us.

What?

Katie Martin is the markets editor for the Financial Times and joins us now from her home in London.

Katie probably listened into Sherborn just then.

I mean, how extraordinary is this in your view, Katie?

Oh, this is right up there.

We've had a really rough around in markets over the past few weeks, but this is quite something.

The oil market has never seen anything like this before.

At the world's point, this particular contract for oil was trading a $40 below zero.

Which means not only our producers paying people toe take the old off their house.

I paid a fair chunk.

Thio.

People take this off their hands too.

No, I guess there are some market technicalities here around what types of oil from which parts of the world are capable of being stalled in particular locations.

But the big picture here is that demand for oil has just completely collapsed as a result is pandemic.

All those airplanes have been grounded.

All those car journeys that we're not making any more of those factories that have been shut down but just absolutely destroys amount of oil around the world, and it's just too much of the stuff and nowhere to put it in certain places.

Well, what does happen to this excess oil and what we're just going to have to find a way Thio cut down production somehow, unless there's a huge spike in demand anytime soon is difficult.

See this situation going away?

So, yes, this is affected a very particular contract of oil.

It's particularly US contract, but unless there is a surgeon global demand, it's very difficult to see how this goes away.

Even the Brent oil prices down about 9% today, which would be a big day for oil if it hadn't been for this collapse in the U.

S.

So what are the implications for the industry, but also for the economy as a whole for the industry?

This is really challenging for those U.

S.

Shale oil producers, which kind of sprung up from pretty much nowhere over the past few years and now one of the biggest supplies world around the world has helped to make us one the world's major suppliers.

This is going to be extremely difficult for them.

A lot of them are loaded up with lots of debts.

That's gonna be difficult to see how they're going to pay it back.

This has been one of the big concerns.

It's been norrin away, Marcus, ever since market started.

Collapsing as a result of this pandemic is what's going to happen.

The shale oil producers Can they handle oil?

These levels?

Nobody can handle oil at these levels Now when you look oil prices these particular or Christ in a couple of days with very different.

Because there is a particular contract for delivery of oil in May on the should be single concussed in Juneau is a mark in a mess.

Kati Marton.

Thank you very much for joining us.