Billionaire investor Howard Marks said oil's unprecedented crash is 'perfectly rational,' and 'not a panic'

• Billionaire Howard Marks is not worried about the oil market crash seen this week and says "the move is completely rational".
• West Texas Intermediate (WTI) turned negative for the first time on Monday and hit a low of -$40.32 a barrel.
• Marks pointed out that US oil prices turned negative due to lack of storage space rather than weakening fundamentals.
• Lack of storage options, particularly at a key storage facility in Oklahoma, and the reduction in demand for the commodity during the ongoing coronavirus pandemic has tanked prices in recent days.
• Brent crude, the international benchmark, is also at historic lows having hit $15.99 per barrel early in trading Wednesday, it's lowest level in over 20 years.
• Watch oil trade live here.

Negative US oil prices, the lowest international oil prices since 1999 and no place to store oil has spooked investors across both sides of the Atlantic, but one billionaire investor thinks it is no big deal.

Billionaire investor Howard Marks who founded Oaktree Capital Management, told CNBC on Wednesday: "It's not a panic. The move is completely rational."

The oil market has experienced multiple new record lows this week. On Monday, US oil prices turned negative for the first time in history, and now the international benchmark Brent crude is also following suit, dropping below $20 per barrel to a two-decade low.

Marks pointed out that the lack of storage for oil has caused the crash rather than weakening fundamentals.

"The ultimate complication is that storing oil costs money, and storage facilities aren't unlimited. Right now storage is scarce and thus expensive, so it's not worth it to buy oil today and store it. The cost of storing exceeds the value today; thus the price is negative."

Lack of storage options, particularly at a key storage facility in Oklahoma, and the reduction in demand for the commodity during the ongoing coronavirus pandemic has tanked prices in recent days, culminating in Monday's stunning fall.

The WTI May contract fell as low a -$40.32 a barrel, meaning traders had to pay others to take the contracts off their hands.

This sentiment fed into Brent which continued to drop Wednesday, hitting a low of $15.99 per barrel early in trading. It has since rebounded to positive territory but remains near multi-decade lows at $19.63 as of 7.00 a.m. ET.

The coronavirus has heavily impacted demand for oil, with economic activity subdued as a result of every major economy in lockdown and a drastic fall in travel.

The price volatility in the oil market comes despite a historic deal signed by OPEC and its allies earlier this month, to reduce supply by 9.7 million barrels a month from next month.

The plummeting Brent price on Tuesday prompted the OPEC to hold an emergency phone calland explore the possibility of reducing supply with immediate effect rather than from next month as initially planned.

Nothing came out of the meeting.

Marks suggests that oil prices will remain low until the shortage in storage persists.

He added: "Oil production can't just be turned off, because for production some wells depend on pressure that a shut-off complicates. So, oil is coming out of the ground that exceeds the amount needed for consumption."