For those chatting about ~$0 oil... you must understand this is specifically the forward contract for physical delivery. Oil (and other commodities) are traded both as physical products and fin'l instruments, and both in "spot" markets for immediate purchase and as futures/tions.

The oil price that's approaching zero is specifically the May physical delivery forward contract, i.e. buying oil that you physically have to take possession of in May. A forward is a contractual obligation, not an option, to buy. Demand is obviously depressed w/ lockdowns.

But the bigger driver of why May contract is nearing zero is the transport & storage costs for oil. If you own a barrel of oil delivered in May, you have to transport it from where it’s supplied and then stick it in a tank, or a ship, or refinery, etc.

There's already ample supply for the lowered demand and limited places to transport/store excess crude near term. So when the costs of transport/storage outweigh limited demand, physical delivery contracts will become near worthless.

So May physical delivery forward contract may go to $0 or even negative, but forward price for oil in June and beyond is still >$20 barrel as of right now.

For context, global demand for oil was ~100M bbl/day pre pandemic. It's down roughly 25% to ~75M bbl/day which is a very significant demand shock, but worth realizing that demand hasn't dropped as some might think.

Also the price of physical delivery varies by location and grade. Oil produced far away from demand is worth less since transport costs higher. Also low grade crude worth less since it takes more energy to refine it into things people want (gasoline etc).

So that's why contacts for say Canadian tar sands are now negative... high transport costs and low grade, whereas other locations/grades are higher prices.