How the price oil became less than zero : The Indicator from Planet Money The price of a barrel of West Texas Intermediate crude oil fell below zero. In other words, suppliers were paying people to take it off their hands. How did that happen? And what does it mean?
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Oil: Less Than Zero

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Oil: Less Than Zero

Oil: Less Than Zero

Oil: Less Than Zero

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David McNew/Getty Images
TAFT, CA - JULY 22: Oil rigs just south of town extract crude for Chevron at sunrise on July 22, 2008 in Taft, California. Hemmed in by the richest oil f(Photo by David McNew/Getty Images)
David McNew/Getty Images

Usually, the market for oil is like any other market: it's all about supply and demand. But the oil market today is different. Thanks to coronavirus, the global economy has stalled, and no-one's using oil products to drive or fly or make chemicals and plastics. But producers are still pumping, because it's not easy to just shut down oil production facilities. So what used to be a supply and demand equation has become a supply and storage equation, and there simply isn't enough storage capacity out there.

So what's a producer to do? Companies pumping West Texas Intermediate crude found yesterday that because there is zero demand and close to zero storage capacity, they've had to pay buyers to take the oil off their hands. It's one of the most bizarre upsets the business has ever seen and it could have enormous implications for the global market in oil, as well as for the global economy.

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