On April 20, something occurred that was unprecedented in the history of financial markets: The price of oil went negative.
It wasn’t the case that the cost of a barrel had fallen to some scary-low number. It actually went below zero, meaning there were traders out there who would pay you to own oil. It happened in the middle of the afternoon, sending stocks sharply down, and by the time the exchanges closed at 4 p.m., many financial news outlets were still struggling to explain why.
“Commodity futures need to be standardized and tied to a physical delivery point, which in this case was overwhelmed,” wrote one publication. “The front part of the oil futures ‘curve,’ which is the May contract that expires on Tuesday, was hit the hardest since it applies to fuel that’s set to be delivered while most of the country remains on lockdown thanks to the coronavirus,” said another outlet.
One group of news consumers got a more comprehensible take. The approximately 150,000 people who subscribe to Money Stuff, a free newsletter written by Matt Levine, a columnist at Bloomberg, found an email in their inboxes with the subject line “There’s Nowhere to Put the Oil.”
More here – The New York Times