The real price of West Texas crude hasn’t fallen below $0.

If you thought negative interest rates were bizarre, how about minus-$37 for a barrel of oil? That was the going price for a time on Monday on the futures contract for a barrel of West Texas Intermediate crude delivered in May. To put it another way, it would cost you less under that contract to fill your bathtub with oil than to fill it with water. So goes the continuing turmoil in oil markets from the collapse in demand amid the coronavirus pandemic and global recession. The real price of oil isn’t less than $0. The bizarre behavior in futures markets is a combination of crashing oil demand today and expectations for higher oil prices later in the year when the economy is beginning to recover.

If you thought negative interest rates were bizarre, how about minus-$37 for a barrel of oil? That was the going price for a time on Monday on the futures contract for a barrel of West Texas Intermediate crude delivered in May. To put it another way, it would cost you less under that contract to fill your bathtub with oil than to fill it with water. So goes the continuing turmoil in oil markets from the collapse in demand amid the coronavirus pandemic and global recession. The real price of oil isn’t less than $0. The bizarre behavior in futures markets is a combination of crashing oil demand today and expectations for higher oil prices later in the year when the economy is beginning to recover.

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