Too Much Oil: How a Barrel Came to Be Worth Less Than Nothing

Too Much Oil: How a Barrel Came to Be Worth Less Than Nothing

One oil price went negative on Monday, signaling that there is no place to store all the crude the world is producing but not using.. Something bizarre happened in the oil markets on Monday: Prices fell so much that some traders paid buyers to take oil off their hands.. The price of the main U.S. oil benchmark fell more than $50 a barrel to end the day about $30 below zero, the first time oil prices have ever turned negative.. Futures contracts that require buyers to take possession of oil in May are expiring on Tuesday, and nobody wanted the oil because there was no place to store it.. With a capacity to hold 80 million barrels of oil, Cushing has only 21 million barrels of free storage left, according to Rystad Energy, or less than two days of American production.. The reserve has about 635 million barrels of oil, and is equipped to store 75 million barrels more.. The huge drop in prices on Monday was exaggerated by the way oil prices are set.. At the current pace, American production will decline to less than 11 million barrels a day by the end of the year, from 13.3 million