“The tens of billions of dollars traded every day in WTI futures are almost always settled financially, but any contract that hasn’t been closed out after expiry has to be liquidated with a physical delivery of oil if the parties can’t come to some kind of OTC agreement.” https://twitter.com/bw/status/1252339068739833859

In other words, traders that have invested in oil futures contracts (a contract that specifies they will take delivery of the quantity they buy at some specific point in the future) but have nowhere to store the oil (ie they can’t take delivery), have to sell.

If they don’t sell, they will literally have to take delivery of the thousands, tens of thousands or millions of barrels their contracts are worth.

So rather than dealing with that headache, they desperately sold their contracts at even negative in some cases.

Because the prospect of them having to take delivery of so much physical oil looms larger the closer the date of expiration of the contract comes.

So they are better off selling their contracts at even -$30 per barrel (ie paying someone else to take delivery)..

so they don’t have to deal with it.

As oil prices stay so low and these futures contracts expire (contracts are always expiring), we will continue to see this sort of downward pressure until demand picks up (ie people start driving and moving around) and supply is cut.