Negative Oil Prices 2020
About Negative Oil Prices 2020
On April 20, 2020, West Texas Intermediate crude oil futures traded at minus 37.63 dollars per barrel. Sellers paid buyers to take oil off their hands. The bizarre event was caused by COVID 19 lockdowns destroying demand while storage facilities were full. The Cushing, Oklahoma storage hub was near capacity. Traders with expiring futures contracts were forced to sell at any price. The negative price was unprecedented and revealed the limits of commodity markets during extreme disruptions. Oil prices recovered within weeks as production was cut, but the event remains a historic anomaly that shocked the world.
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