This question is asking why the oil (in this case, WTI) price is negative.

While I think I have broadly understood why WTI collapsed, I don't really understand why other oil pricing benchmarks didn't suffer the same fate. Brent oil, for example, to take the most famous one, suffered losses but was still around $20 per barrel.

  1. What explains the fact that WTI and Brent acted in such different ways?

  2. Is it that that Brent can be better stored? Transported? Refined?

  3. Are the shut-in clauses or future contracts different?

What major factors explain why WTI went negative, while Brent did not?


1 Answer 1


The Brent price is for oil physically delivered in the UK. The price that went negative if for oil delivered in West Texas, US. The physical and economic conditions at the two places are different - volume available, flexibility of that volume, demand, storage, and so on. This leads to different prices.

  • 1
    $\begingroup$ WTI is delivered in Cushing, Oklahoma. $\endgroup$
    – Michael
    Commented Apr 23, 2020 at 2:45

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