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Dow falls by nearly 600 points as oil prices plunge to historic negative levels

Stocks dove Monday as oil prices plunged to historic lows, crossing into negative levels for the first time since oil futures trading began in 1983.

The Dow Jones Industrial Average closed with a loss of 592 points, falling 2.4 percent on the day after the price per barrel of West Texas Intermediate crude oil for delivery in May dropped as low as negative $40. At that price, petroleum producers are effectively paying other parties to hold and store oil amid an unprecedented decline in energy demand driven by the coronavirus outbreak.

The S&P 500 also sank 1.8 percent, while the Nasdaq composite fell 1 percent.

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Oil is traded through monthly contracts and the Monday drop in oil prices came on the last day to purchase oil to be delivered in May. A steep and sudden plunge in travel caused by the widespread adoption of social distancing practices created a glut of oil, filling up warehouses and leaving suppliers with no place to keep the unwanted fuel.

Prices for oil to be delivered later in the year remained in line with normal historic levels, paving the way for a likely rebound on Tuesday. But Monday’s historic sell-off reflects the depth of the economic devastation caused by the coronavirus pandemic.

While President TrumpDonald TrumpWarren says Republican party 'eating itself and it is discovering that the meal is poisonous' More than 75 Asian, LGBTQ groups oppose anti-Asian crime bill McConnell says he's 'great admirer' of Liz Cheney but mum on her removal MORE has voiced optimism in a swift rebound to the strong pre-pandemic economy, a massive shortfall in testing capacity means the recovery will likely be long and grueling.