West Texas Intermediate was trading below zero in futures trading yesterday for the first time in history, but that could prove beneficial for the province’s offshore oil industry in the long run.

The collapse in fuel consumption caused by measures in place to control the spread of COVID-19 has resulted in a lack of storage capacity in the US.

Newfoundland and Labrador bases its budget on Brent Crude, which is less volatile but sits at about $25 a barrel, well below the $63 a barrel on which the provincial budget is based.

Larry Short, a portfolio manager with Short Financial, says while that’s bad for this province right now, it could be good news in the long-term.

He says low prices are destroying supply, especially among the American frackers, who he says ruined the province’s oil forecast by flooding the market with oil starting in 2014. Those frackers are now going bankrupt according to Short, meaning that banks will be reticent to finance long-term oil projects unless they’re very well established, like the companies involved in the offshore.