Question

Why did oil prices become negative in the middle of April? Why didn't consumers see negative prices at gas stations?

Answer 1

Unprecedented activity in the crude oil futures contracts market, where traders effectively agreed to pay someone else for the oil they were expected to supply next month.
The price of U.S. oil benchmark produced in May was selling for around $15 a barrel but plunged as low as $40 a barrel during the day. This was the first time that the price of a futures oil contract has gone negative There is little mystery as to why there is so little demand for oil: attempts to restrict the spread of coronavirus have major cities across the world on lockdown, air travel has been significantly curtailed, and millions of people are operating from home, resulting in even less traffic

But pumps also work, removing oil from the ground and all the oil has to go somewhere. Here are some questions and answers about the latest developments in the oil patch: Occasionally, a unexpected occurrence will distort the price on the future supply of oil, claim an oil pipeline bursts. This may trigger the price of a futures contract to be significantly higher or lower for a given month than that of a futures contract for the next month.

Cheap oil results in lower gasoline rates, which are also seen as a positive for customers. The average price in the U.S. for a gallon of standard gasoline dropped to around $1.49 or less, more than $1 less than a year ago But this time around, it's not good for anybody "Usually when oil prices fall, fuel prices fall, and customers profit, but prices fall today because not anybody drives, they drive a lot, a lot less.