The Price of Oil Didn’t Fall to -$40 Yesterday

Sure, that looks like a lot of storage. But it's mostly already spoken for.Shane Bevel/ZUMAPRESS

Get your news from a source that’s not owned and controlled by oligarchs. Sign up for the free Mother Jones Daily.

We’ve all had our fun, but after watching the evening news today I have to ask: Everyone knows that the price of oil didn’t really fall to negative $40 yesterday, right?

All that happened was that the price of one particular futures contract fell below zero. This contract comes due on Tuesday and requires the buyer to take physical possession of the oil. Unfortunately, thanks to the COVID-19 oil glut, there’s little storage available and its price has skyrocketed. Under these extreme conditions, taking delivery of the oil and buying storage for it would be a guaranteed huge loss. This caused many investors and speculators to panic and dump their contracts at any price—even if they had to pay someone to take it off their hands.

Anyway, that’s it. The price of one particular futures contract, late in the day, was a victim of panic selling. The price of oil in general was largely unaffected. It’s still dropping, mind you, but not in any kind of dramatic way.

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate