An oil futures contract expiring Tuesday went negative in bizarre move showing a demand collapse
A futures contract for U.S. crude prices dropped more than 100% and turned negative for the first time in history on Monday, showing just how much demand had collapsed because of the coronavirus pandemic.
But traders cautioned this collapse into negative territory was not reflecting the true reality of the beaten-up market. The price of the nearest oil futures contract, which expires Tuesday, detached from later month futures contracts, which continued to trade above $20 per barrel.
West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands.
This negative price has never happened before for an oil futures contract. Futures contracts trade by the month. The June WTI contract, which expires on May 19, fell about 18% to trade at $20.43 per barrel and was …continued .
[Source: CNBC News]