The Real Reason Oil Prices Went Negative In April

Unusually high open interest in West Texas Intermediate was one of the two causes for the benchmark plunging into negative territory in late April, according to a report by the U.S. Commodity Futures Trading Commission. The high open interest, the report said, coincided with a shortage in storage space and the unprecedented destruction of demand resulting from the coronavirus pandemic. The report added that open interest in WTI reached 634,727 contracts on April 2. This compared to a 12-month average peaking at 430,000 contracts. The price of West…