Last month, analysts started warning that oil prices could fall below zero. On Monday April 20, they did.
The May futures contract for West Texas Intermediate (WTI) crude oil fell as low as minus $37.63 per barrel, the first time ever that the price of the commodity has entered negative territory. By contrast, the June WTI contract is trading at around $20 per barrel, marking the biggest percentage difference between the two front-month contracts in more than 40 years. What has caused this super contango - where prices for future delivery are above spot prices - to develop? As Mizuho Securities managing director Paul Sankey said last month, negative oil is simply a reflection of a...