How Did WTI Crude Oil Futures Go Negative in April 2020, and Could It Happen Again?
Direct answer
Why WTI went negative
WTI went negative because of how a physically delivered futures contract expires. The May 2020 NYMEX WTI contract required anyone still holding it at expiry to take delivery of oil at Cushing, Oklahoma. In April 2020 demand had collapsed and storage there was filling, so traders who could not take delivery had to sell, and buyers demanded to be paid. According to the CFTC, the contract fell from $17.73 to settle at −$37.63 on April 20, the day before it expired; the EIA says it touched −$40.32 intraday, the first negative price since WTI futures started trading in 1983. It can happen again in principle when storage is tight near expiry, which is why retail brokers close or roll positions before then.
- May 2020 WTI settled at −$37.63 on April 20, 2020 (CFTC)
- Intraday low −$40.32, first negative since 1983 (EIA)
- Contract was 1 day from expiry with physical delivery at Cushing
- Storage was filling and demand had collapsed
- Only about 1% of futures go to delivery (EIA)
- FRED WTI spot: $18.31 → −$36.98 → $8.91
- Brent spot never went below $9.12
Six years on, "oil went negative" is still the go-to example of how strange futures markets can get. The cause was less about oil being worthless and more about the mechanics of one contract on one day.
What people on X are asking
In April 2026 one reply recalled that WTI closed at minus $37 a barrel and holders of expiring contracts had to pay buyers to take it, because the May 2020 contract was going into physical delivery. An education account listed the reasons as demand collapse, full storage and panic before futures expiry. A quant thread said traders literally paid people to take oil off their hands, and in December 2025 someone simply asked: remember when oil went negative? Why does that feel like a lifetime ago? The posts are broadly right; the detail that matters is the expiry.
The fact-checked answer
The numbers. The CFTC said the May 2020 WTI crude contract on NYMEX fell from $17.73 to settle at −$37.63 on April 20, 2020, a $55.36 drop, the day before expiry. The EIA reported an intraday low of −$40.32 at about 2:30 p.m. Eastern, the first time WTI futures had traded below zero since trading began in 1983. FRED's daily WTI spot price shows the same shape: $18.31 on Friday April 17, −$36.98 on Monday April 20 and back to $8.91 on April 21.
UXS chart
WTI and Brent spot oil prices around April 2020 ($ per barrel)
WTI spot (Cushing): latest
$99.64/bbl
November 3, 2026
Brent spot: latest
$107.03/bbl
November 3, 2026
Year by year: WTI spot (Cushing)
Computed by UXS from the same data as the chart. Tap a column header to sort. * = year to date (latest data November 3, 2026).
| 2026* | $99.64/bbl | +74.0% | $114.58/bbl | $56.01/bbl | $107.03/bbl |
| 2025 | $57.26/bbl | -21.0% | $80.73/bbl | $55.44/bbl | $61.35/bbl |
| 2024 | $72.44/bbl | +0.8% | $87.69/bbl | $66.73/bbl | $74.58/bbl |
Why delivery mattered. WTI futures are physically settled: if you hold a contract after the last trading day, you must make or take physical delivery of WTI crude at Cushing, Oklahoma, unless other arrangements were made. The EIA notes that only about 1% of futures contracts go to delivery; In April 2020, with demand crushed by lockdowns, US refinery runs in the week to April 17 were 24% below a year earlier, and Cushing held 60 million barrels against 76 million barrels of working storage capacity, according to the EIA. It cites low liquidity and the scarcity and high cost of storage, with some holders selling at negative prices, in effect paying a counterparty to let them exit. Holders without storage had to sell, and the few buyers who could store oil set the price. When nobody wants to take delivery, the price you have to accept to get out can drop below zero.
UXS decision diagram
How an expiring futures contract can go below zero
Text version of the diagram
- Are you still long the contract close to expiry? If no: Rolled or closed already: not exposed to the delivery squeeze
- Can you take physical delivery and store the oil? If yes: You can hold through expiry and take the barrels
- Is storage near the delivery point almost full and demand weak? If yes: Few buyers can take delivery; bids fall sharply
- Must you sell before the last trading day? If yes: You accept any bid, even a negative one
- Otherwise: Negative settlement: the seller pays the buyer to take the contract
Diagram drawn by UXS. A simplified decision aid for education, not a recommendation.
A futures event more than a physical one. The EIA noted that prices stayed below zero for part of the following day, and that negative prices were likely to be confined to the financial market, with few physical sellers paying to sell their oil. This is the extreme version of contango, where near months trade far below later months; see contango vs backwardation. Brent, priced as a seaborne crude, never followed WTI below zero: FRED's Brent spot low in those weeks was $9.12.
Who got hurt. Anyone long the May contract near expiry, including traders using brokers that hadn't closed positions, and products tracking the front month. Investors in oil funds that hold futures faced heavy roll costs as they swapped expiring contracts for dearer later ones; see how futures expiration and the contract roll work. For the basics, see what futures contracts are, what moves oil prices and the long view in our WTI and Brent price history.
Could it happen again? In principle, yes, for any physically delivered contract when storage is scarce and holders cannot take delivery. Many retail platforms now close positions days before expiry or offer cash-settled CFDs. The CFTC's futures basics stress that futures can lose more than you invest, and April 2020 showed it literally: a long position lost more than the full contract value.
Another extreme futures event: the LME nickel squeeze of March 2022.
Decision helper
| If you trade crude futures… | Do this |
|---|---|
| Long near expiry | Roll or close days before the last trading day |
| Using CFDs | Check how your broker handles the roll |
| In oil ETFs | Read how and when the fund rolls |
| In a strong contango | Expect roll costs |
Common mistakes
- Thinking oil itself was worthless in April 2020.
- Holding the front month into expiry without a plan.
- Confusing the futures settlement (−$37.63) with the intraday low (−$40.32).
- Assuming Brent went negative too.
FAQ
When did oil go negative?
On April 20, 2020, when the May WTI futures contract settled at −$37.63.
Why did oil prices go negative in 2020?
The May contract was a day from expiry and holders who couldn't take delivery at Cushing had to sell as storage filled.
What was the lowest WTI price in April 2020?
About −$40.32 intraday, according to the EIA.
Did Brent crude go negative?
No; FRED's Brent spot low was $9.12 on April 21, 2020.
Was it the first time oil futures went negative?
Yes, the first since WTI futures started trading in 1983.
Can oil go negative again?
It is possible for physically settled contracts when storage is scarce near expiry.
Sources
- CFTC: Statement on May 2020 WTI contract (Release 8315-20)
- EIA Today in Energy: WTI futures prices fell below zero
- FRED: Crude Oil Prices WTI (DCOILWTICO)
- FRED: Crude Oil Prices Brent (DCOILBRENTEU)
- CFTC: Basics of futures trading
Facts checked November 10, 2026. X posts are cited as evidence of the question, not of the answer.