April 20, 2020: The Day Crude Oil Traded at -$37.63

Chronological Account & Crisis Breakdown

In March 2020, as the COVID-19 pandemic grounded airlines and locked down half of humanity, crude oil consumption experienced an unprecedented demand collapse of 25–30 million barrels per day. Compounding the crisis, an OPEC+ price war broke out between Saudi Arabia and Russia, flooding markets with millions of additional barrels.

Cushing inventories reached approximately 76% of working storage capacity by April 17, up from about 50% in mid-March. Much of the remaining space was reportedly already committed, limiting storage available to traders facing physical delivery.

Monday, April 20 was the penultimate trading day before the expiration of the May 2020 NYMEX WTI futures contract. Non-commercial market participants, including retail ETF investors and algorithmic CTAs, held thousands of long contracts. Under exchange rules, any open contract at expiry must take physical delivery of 1,000 barrels of oil at Cushing.

The May contract opened the April 20 trading session at $17.73 per barrel. It fell below zero at 2:08 p.m. Eastern Time, reached an intraday low of −$40.32, and settled at −$37.63.

Sellers were effectively forced to pay buyers $37.63 per barrel just to assume the physical burden of taking delivery. The June contract, which traded above $20 throughout the session, proved that the crisis was an acute deliverability bottleneck rather than an infinite supply of free oil.