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

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

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.

Dear Reader,

This feels like the most important fundraising drive since I've been CEO of Mother Jones, with staggeringly high stakes and so much uncertainty. In "News Is Just Like Waste Management," I try to unpack the reality we all face and how we can rise to the challenge. If you're able to, this is a critical moment to support Mother Jones’ nonprofit journalism: We need to raise $400,000 to help cover the vital reporting projects we have planned, and right now is no time to pull back.

Monika Bauerlein, CEO, Mother Jones

Dear Reader,

This feels like the most important fundraising drive since I've been CEO of Mother Jones, with staggeringly high stakes and so much uncertainty. In "News Is Just Like Waste Management," I try to unpack the reality we all face and how we can rise to the challenge. If you're able to, this is a critical moment to support Mother Jones’ nonprofit journalism: We need to raise $400,000 to help cover the vital reporting projects we have planned, and right now is no time to pull back.

Monika Bauerlein, CEO, Mother Jones

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