U.S. Crude Oil Contract Price Turns Negative

We have all probably been noticing that the coronavirus pandemic has hit the oil market extremely hard with prices dropping sharply over recent months. A very strange thing happened yesterday with the price U.S. WTI Crude Oil May contract settling in negative territory for the first time, settling at – [minus] $37.

Here’s a little commentary on the situation from CNBC’s ‘Mad Money’ show with Jim Cramer in which his guest Rusty Braziel CEO of RBN Energy, who explains that the current situation does not apply to the physical market, but calls it a ‘paper market’ problem (meaning that producers were not delivering oil at a negative cost). He does say it is possible that the physical price of oil could go negative at some point if demand continues to dry up due to coronavirus impacts, and storage facilities are filled.