Why Oil Prices Went Negative

Crude oil storage tanks at a tank farm in Cushing, Okla., in 2016. (Nick Oxford/Reuters)
Because storing oil costs more than the oil itself, traders are paying to get rid of their futures.

NRPLUS MEMBER ARTICLE F or the first time ever, the price of U.S. crude oil has gone negative as the coronavirus pandemic obliterates demand for energy. On Monday, traders and producers paid as much as $40 for the privilege of parting with a barrel of oil.

West Texas Intermediate (WTI) crude sold for more than $60 a barrel just a few months ago. Following the outbreak of the coronavirus, a global collapse in economic activity, coupled with a price war between Saudi Arabia and Russia, brought the price of crude to its lowest level since the 1997 Asian financial crisis. Plummeting prices have set off …

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