In the 2020 oil market, what happened to the May West Texas Intermediate futures price on April 20?

In the 2020 oil market, the May West Texas Intermediate futures price fell below zero on April 20.

The May 2020 WTI contract settled at negative $37.63 per barrel on April 20, 2020, an unprecedented event in the modern history of oil futures trading. The contract was approaching expiration, and traders holding it faced the need to take or arrange physical delivery at Cushing, Oklahoma.

Demand for petroleum products had collapsed during the COVID-19 pandemic, while production and available storage had not adjusted quickly enough. With storage capacity becoming scarce, some contract holders effectively paid others to accept the obligation associated with the oil. The negative price applied to that expiring futures contract, not to every barrel of oil or every oil contract worldwide.

This episode illustrates how supply, demand, inventories, delivery rules, and expectations interact. It also shows why a futures price is not always the same as the cash price consumers see at a petrol station.