What have you always wondered about the economy? Tell Us
A view of pipeline construction, taking place outside Cotulla, Texas back in 2019, for the future transport of crude oil. LOREN ELLIOTT/AFP via Getty Images

U.S. oil prices fall below zero for the first time

Janet Nguyen Apr 20, 2020
A view of pipeline construction, taking place outside Cotulla, Texas back in 2019, for the future transport of crude oil. LOREN ELLIOTT/AFP via Getty Images

The price of U.S. crude oil has fallen into negative territory for the first time ever. 

On Monday, a barrel of West Texas Intermediate crude oil (the standard oil produced in the U.S.) dropped to negative $37.63. In other words, if you wanted a barrel of oil right now, someone would have to pay you — not the other way around.

This is the price on the May futures contract, which expires tomorrow afternoon. Futures contracts are a type of financial security in which two parties agree to buy or sell an asset on a predetermined date at a predetermined price. 

Traders holding that contract have to accept the oil they purchased, but storage capacity is extremely limited right now because of a decline in demand.

“You can usually make money by storing crude and selling it at a higher price on the futures market,” Amelie Carlton, an economics lecturer at Rice University, told Marketplace. “But future traders … don’t want to take delivery of barrels of oil. So what they’re doing is they’re trying to get rid of the physical delivery and selling out of those May positions, which is creating a negative price.”

The decline marks a stark contrast with prices at the beginning of the year, when a barrel of WTI oil cost more than $60. The plunge in demand has also pushed down the average gas price in the U.S. to $1.81 a gallon ($1 cheaper than a year ago), according to AAA.  

Stocks declined in reaction to the news, with the Dow Jones Industrial Average dropping more than 592 points

However, a barrel of WTI crude is trading at $20.43 per barrel for the June futures contract and at $26.18 for the July futures contract.

“That’s more reflective of the real price of a barrel of oil,” Carlton said. “The May contract price — which is negative and dropped substantially today — is more reflective of people’s positions in the market and whether or not they want to accept the physical delivery of a barrel of oil.”

Additional reporting by Bennett Purser.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

Read More


Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.