Take My Oil, Please

Oil storage tank (it's a model) for sale on Amazon.

Another effect of coronavirus economics that even experts have a tough time explaining:

CNBC: An oil futures contract expiring Tuesday went negative in bizarre move showing a demand collapse

West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands.

Your humble blogger has never traded commodities and remembers vaguely from long-ago finance classes that future oil prices are dependent on today's ("spot") price, interest rates, and storage costs.

But the biggest factor can be buyers and sellers' estimate of future supply and demand . A producer can sell oil today, for example, at around $20 per barrel but might be willing to commit to deliver oil at a $15 price in July if the producer thinks demand will be soft.

Oil markets have been pessimistic before, but the futures price has never been negative. The closing price in the headline means that the seller will pay a "buyer" $37.63 to take a barrel of oil on May 1st. I was tempted to place an order to take delivery of oil and get paid for doing so, but I don't have a place to put 1,000 barrels, the minimum size of a futures contract.

The anomalous situation will undoubtedly right itself tomorrow, but there have been too many glitches in the Matrix recently:

Governments voluntarily killed their economies for a month or longer, akin to doctors stopping the patient's heart to perform an operation.

A roaring economy and stock market have collapsed into a deep recession and bear market, respectively, in a matter of weeks.

After a primary season with more than two dozen contenders, the Democrats have picked the worst candidate possible. Anybody in the Boston phonebook will perform better in a debate with Donald Trump.

Celebrities voluntarily broadcast their images without make-up, and many just look like ordinary people.