NATIONWIDE — Currently, a barrel of oil might cost less than your lunch.
According to the Associated Press, as of April 21, U.S. benchmark crude oil was trading as low as $6.50 per barrel.
You can blame it on coronavirus. People, under stay-at-home orders, aren’t driving much. They’re not flying, either.
Oil is still being pumped, however, and in some cases there’s not even sufficient storage for it. Global demand was expected to drop by 29 million barrels per day in April. Texas produces about 40 percent of U.S. oil, and regulators are considering cutting production by roughly 1 million barrels per day.
Should I Invest in Oil Now?
If you’re inclined to go bold when it comes to investment, now might appear like a good time to put your money in oil. However, it turns out oil is a risky investment in the best of times, and it could take a long time for the industry to recover. A modest investment to diversify your portfolio might be your best bet at the moment.
Individual investors generally don’t purchase barrels of oil, but what you can do is buy shares of an exchange-traded fund, which tracks oil prices. You may also choose to buy oil company shares, such as Exxon.
Just keep in mind that the industry is likely to remain volatile for a long time as demand for oil remains low during the coronavirus pandemic. It’s best to reach out to an investment professional before making any decisions.
The Associated Press contributed to this report.
