The negative oil price meant traders couldn’t give the stuff away – here’s what that means

With a lot more oil being produced than anyone can use and storage space running out, the oil price briefly turned negative. John Stepek explains what that means.

Crude oil storage facility © Joe Raedle/Newsmakers/Getty Images
Oil storage space is running out © Getty
(Image credit: Crude oil storage facility © Joe Raedle/Newsmakers/Getty Images)

The oil price fell by more than 250% yesterday. Yes, you read that correctly. The oil price started the day at a bit below $20. By the end of the day, the price had turned negative. And it closed the trading day at -$37.63 (although at one point it went below -$40).

I know you’re fed up with the word “unprecedented” so I’ll just say: this has never ever happened before. (As if you needed to be told that). So let’s answer the obvious question first – what on earth is going on?

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.