It was recently all over the news (and this site) that the price of May 2020 oil futures was briefly negative. By my understanding, the immediate cause was that the oil was delivered through a pipeline which connected only to a few refineries, which had limited storage. This seems like an unusual situation, and indeed one user here can't recall it happening to another commodity. But some other commodities (say, livestock) are difficult to store without specialized facilities, so had a futures contract for any commodity in any market traded for a negative price before this incident?

  • North Dakota, 2016. oilprice.com/Energy/Oil-Prices/… The negative price (-$0.50) is discussed in the article, but it isn't clear if any changed hands at that price.
    – Doug Deden
    Commented Apr 22, 2020 at 18:38
  • Chicago commodity exchanges have a very deep history and many astounding things happened in the early days.
    – S Spring
    Commented Apr 22, 2020 at 19:46

1 Answer 1


Yes, this happens more often than you would think usually driven by oversupply and/or an infrastructural contraint. Please see this other answer of mine for a very long answer on how we arrived at negative crude oil prices.

The only unique thing about recent headlines is the fact that it happened to one of the most liquid crude oil contract/locations in the world. However, we've flirted with negative pricing in some constrained producing basins where there's limited capacity to take product to market, or the available means of transportation is too expensive relative to price (e.g. rail out of the Bakken Shale).

As for other commodities, the linked answer also mentions and explains negative natural gas prices in the Permian basin. This also occured in the Marcellus shale for similar reasons...too much production, too little in-basin demand or storage, and too little transportation capacity to demand markets.

There are also recurring examples within the electricity markets, although there is the caveat that until recently (and not even definitively so yet), electricity storage didn't exist on a large enough scale to affect price economics. Two factors that have driven negative electricity prices in the past have been 1. Renewable generation at low demand times (e.g. high wind generation at night) 2. Plants that would rather pay someone to take the electricity than switching off a plant that has a long turnaround time to get back on when it is needed.

Other examples escape my mind at the moment, but rest assured, negative prices are not such a unique phenomenon although it might be for a specific contract/location. Every commodity that has a cost to store, move or process it could theoretically be negative. All that has to happen is for supply to far surpass demand and excess supply surpass either/both storage, export and/or processing capacity.

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