A trader works at the New York Stock Exchange in New York, the United States, on Aug. 14, 2019. Photo:Xinhua

An oil futures contract expiring Tuesday crashed into negative territory for the first time ever on Monday, a glaring warning over the glut of crude oil amid the pandemic that has gravely darkened the global economic outlook.

Asia-Pacific markets that have over the past month gradually recovered from a harrowing global stock rout seem subdued on the oil slide. China's A-share market that has largely moved upward over the past month is also feeling the pressure. 

The May contract for West Texas intermediate crude, the benchmark for US crude oil, was pummeled, dropping over 100 percent to settle at a historic low of negative $37.63 per barrel, suggesting that traders would be paid by producers to take the oil.

An oil price war between Saudi Arabia and Russia has slammed oil prices, and a historic deal the world's top oil-producing nations lately pulled off to cut one-tenth of global petroleum supply failed to do much to spike oil futures. Oil demand destruction amid the pandemic renders the unprecedented production cut insufficient to underpin short-term oil futures. 

The US, initially a bystander amid the price war, is increasingly being pulled, as it finds itself in a predicament as its shale oil producers carry much higher productions costs than the two initiators of the price war.

Therefore, the US oil benchmark plummeted into negative territory, precipitating later-dated futures into a downward trend. Brent crude oil, a major benchmark for oil purchases globally, was sucked into the slide. 

The historic plunge is likely to worsen debt pileups for US shale gas producers, which will balloon US corporate debt as a whole and weighing on a US economy that is already hard-hit by the pandemic.  

The NASDAQ ended lower on Monday, swinging from earlier gains on Monday, an indication of the crude glut's impact on the stock market. 

Asia-Pacific markets have largely been following the US-set course, thus the downward pressure on the US market is expected to feed through into Asia-Pacific markets. 

Still, it's likely that the A-share market will trend downward in the foreseeable future rather than the other way around, factoring in unfavorable global market trends that are compounded by a strong technical resistance the flagship Shanghai index faces at about 2,850 points. The Shanghai index on Tuesday closed down 0.9 percent to 2,827.01 points. 

An overall tepid performance lately by the tech-heavy ChiNext index, the best-performing Chinese index, also dampens risky appetites for mainland stocks at large.