Monday, April 20, 2020

BREAKING: Oil Futures May Contract Price Goes Negative

The West Texas Intermediate May oil futures contract is plunging. The current price is 12 cents a barrel. Yes, 12 cents. It is down 99.34% on the day.

It is the lowest price since crude futures started trading in 1983. The previous low was $10.20, which crude hit on March 31, 1986.

As I am reporting in the EPJ Daily Alert, the collapse is caused by the fact the contract expires tomorrow and there is no place to store the oil. Storage costs are soaring.

You can store oil on tankers but the price to lease a very large crude carrier has gone from $14,000 a day to $400,000 a day.

I emphasize, this is a storage problem. You are not going to see such low prices at your local gasoline station. The current price for the August contract is $30.20 per barrel.


The price of WTI oil for the May contract just went negative, to minus $7.21 or down 134% on the day.

If you own a futures contract to take delivery of oil, you need to sell now and take a very huge loss or end up with oil being dumped in your backyard (figuratively speaking).


The price is now negative $23 per barrel.


Negative $35.20.


The contract settles at the end of the day's trading at negative $37.63 a barrel or down 292.66%.



  1. Gee, Robert, this smells like inflation to me. Seriously, I think that this slightly over-whelms the recent increase in the price of pork that you posted.

    1. You may want to read the post again.

    2. I guess that satire is a lost art. So I have to explain this?! Robert has promised us serious inflation because of the Fed money machine. He has even cited rising pork prices as evidence, perhaps, of things to come. Well, crude oil prices at levels not seen since 1862 (yes, 1862) of .10 cents/barrel (yesterday) hardly portend of any massive inflation; precisely the opposite. The world is awash with the most important energy input on the planet and this is massively deflationary. Can the Fed overcome this? In theory, yes, but it will not be any slam dunk as Robert seems to think.

    3. I don’t see why even woth oil crashing, as well as other items crashing, we still can’t have price inflation on the items that we need and want. Oil crashed, because no one is using it. But other goods won’t, I don’t think, and will have price inflation. Can’t there be deflation in one sector, and inflation in another?

  2. Hey look, you can't just turn an economy off and on like a light switch. Why didn't the epidemiologists think of that?!