The details of how and why a specific futures contract of West Texas Intermediate (WTI) crude went negative last week have been dissected at many forums. The negative settlement pricing was caused by an extreme case of over-supply.
This was an unusual situation and it may not repeat. But energy prices have been depressed ever since the crisis started and the scale of the pandemic became apparent. Despite the Organisation of the Petroleum Exporting Countries (Opec) and Russia agreeing to cut production, prices have continued to move down.
They are likely to stay down for an extended period. While the world is
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