Prices for West Texas Intermediate, the U.S. benchmark for crude oil, could fall back below zero and go as low as negative $100 per barrel next month, one industry expert said.

Monday's closing price of negative $37.63 per barrel may be not an isolated incident, said Mizuho Bank oil industry analyst Paul Sankey. In a new research note, Sankey said the same market conditions -- rapid filling storage tanks and falling demand -- could get worse over the next month and take WTI prices as low as negative $100 in May.

"This negative price was not a purely paper anomaly," Sankey said. "It was the reality of paper markets meeting physical markets, and the last holders of the May contract for crude being unable to get out of their ultimate requirement to take delivery of crude at landlocked Cushing, Oklahoma."

OIL CRASH: U.S. oil price falls below zero as storage fills up

Shutdowns and people staying at home due to the coronavirus pandemic have cut global demand for crude oil by more than 20 million barrels day. That rapid decline in demand, Sankey said, happened faster than U.S. oil producers can shut down production, resulting in storage tanks filling up fast.

"We have clearly gone to full scale day-to-day market management crisis, and as we said when we first called for negative prices, the physical reality of oil is that it is difficult to handle, volatile, potentially polluting, and actually useless without a refinery," Sankey said.

U.S. crude oil production needs to fall by 2 million barrels per day by the third quarter to help balance the market, previous Mizuho Bank models show. Sankey predicted negative oil prices in March and believes storage issues mean they could happen again in late May when the future contract for June deliveries expires.

"If you had a stinking barrel of oil in your back yard, would you pay someone $100 a barrel to take it away?," Sankey said. "Yes, and you would probably be relieved you were not charged $300 a barrel. That is the situation we are in, of producers having nowhere to go with the inexorable production that takes weeks and months to reduce to zero."

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