How are Negative Oil Prices Even Possible!? 🛢️

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How are Negative Oil Prices Even Possible!? 🛢️

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Oil crash explained: How are negative oil prices even possible? Can oil prices go negative? Why did the crude oil contract actually traded at a negative price? Recently we’ve had a very unusual scenario when the price of oil was trading at a negative price. When you think of a commodity price you’d think that the commodity will always be worth something and that the floor is zero. But crude oil actually traded at negative value – what does this mean? What do negative oil prices really mean?

Don’t forget that a futures contract is a unique trading vehicle – in crude oil there is a futures contract for every month. Each of those contracts trades at a unique price so there’s a May, June, July, September contract. Usually there is the most activity in the front month which is the one where most speculators are present. What happens with negative oil prices? How do negative oil prices work?

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Oil Crash Explained: How are Negative Oil Prices even Possible? 🛢️