Crude Oil Trading: WTI, Brent and the Day Oil Went Negative
Crude oil trading is the buying and selling of oil contracts, mainly WTI futures on NYMEX and Brent futures on ICE, each for 1,000 barrels. On 20 April 2020 the expiring WTI contract closed at minus $37.63, the only negative close in the daily record.
Oil is the commodity most people have heard traded, and the one most likely to surprise them. It is quoted as one price on the news, but it trades as several, and each is attached to a contract with a place and a date.
How it works
Crude oil trades mainly as futures: agreements to buy or sell a set amount of oil for delivery in a set month. Each month is its own contract, and the price on the news is usually the nearest one, the front month. When that contract nears expiry, traders who do not want barrels close it and move to the next month, which is called rolling.
Oil is quoted in US dollars per barrel. Both benchmark contracts below are 1,000 barrels, so a move of one dollar a barrel changes a position by $1,000 per contract.
WTI and Brent, the two benchmarks
WTI is the US benchmark. CME Group’s page for NYMEX light sweet crude oil futures, symbol CL, gives a contract unit of 1,000 barrels, prices in dollars and cents per barrel, and a minimum move of 0.01 per barrel, worth $10.00.
Settlement is deliverable. Delivery is made free on board at pipeline or storage facilities in Cushing, Oklahoma. Trading ends 3 business days before the 25th calendar day of the month before the contract month, or 4 business days before if the 25th is not a business day (cmegroup.com, read 25 Sep 2026).
Brent is the international benchmark. ICE Futures Europe lists Brent Crude futures, hub North Sea, at 1,000 barrels with a one-cent minimum move. ICE describes it as a deliverable contract based on exchange-for-physical delivery, with an option to cash settle against the ICE Brent Index price, and trading ends on the last business day of the second month before the contract month (ice.com, read 25 Sep 2026).
The difference that mattered in 2020 is the delivery point. A WTI contract held to expiry means taking oil at Cushing, an inland hub. Someone who cannot take or store the barrels has to sell the contract before trading ends, whatever the price.
A worked example
Work out the last trading day of the May 2020 WTI contract from CME’s rule. The 25th of the month before, 25 April 2020, was a Saturday, so trading ended 4 business days earlier: 24, 23, 22 and 21 April. The contract’s final session was Tuesday 21 April.
Now the move on the day before. Yahoo Finance’s front-month WTI series closed at $18.27 a barrel on Friday 17 April 2020 and at −$37.63 on Monday 20 April. The change is −$37.63 − $18.27 = −$55.90 a barrel. On one 1,000-barrel contract that is −$55,900, from a position whose whole value at Friday’s close was $18,270.
A negative price means the seller pays the buyer. A holder who closed a long contract at −$37.63 paid $37,630 on top of losing the $18,270 it had been worth. The next close in the series, on 21 April, was $10.01.
The original data
The data: the U.S. Energy Information Administration’s daily spot prices for WTI at Cushing, from 2 Jan 1986, and for Brent, from 20 May 1987, both to 22 Sep 2026, read from the EIA’s history pages on 25 Sep 2026. Alongside them, Yahoo Finance’s front-month futures series for WTI from 23 Aug 2000 to 24 Sep 2026. The spot files are published as a CSV of WTI spot prices and a CSV of Brent spot prices.
Only one day in either series closed below zero. The EIA’s Cushing spot price was −$36.98 on 20 April 2020 and the front-month future −$37.63. Brent spot that day was $17.36, so Brent stood $54.34 above WTI, the widest gap in the 8,400 days where both have a price.
Brent’s premium over WTI is recent. On the 4,554 matched days before 2011, Brent closed above WTI on 13.4% of them, with a median gap of −$1.40, meaning WTI was usually the dearer of the two. On the 3,846 matched days since the start of 2011, Brent was above on 95.8%, with a median gap of +$4.75.
How far oil moves
Oil is far more volatile than the stock index. On 6,540 dates both the WTI future and the S&P 500 have closes, 23 Aug 2000 to 18 Sep 2026, leaving out 20 April 2020’s negative close. The daily change in oil had a standard deviation of 2.69%, against 1.21% for the S&P 500. Oil closed 5% or more from the day before on 309 of those days; the index did so on 38.
The swings run for years, too. The front-month future closed at a record $145.29 on 3 Jul 2008 and at $33.87 on 19 Dec 2008, 76.7% lower within six months. In 2026 alone it ranged from $55.99 on 7 Jan to $112.95 on 7 Apr, and it closed at $94.61 on 24 Sep.
In the 24,971-video corpus this site studies, 8 titles contain the word crude, from 7 channels, at a median of about 3,011 views. The expiry mechanics above, which decided who lost money in 2020, are not what those videos are about.
When it fails
The first failure is holding a WTI contract into its final days. The contract is deliverable at Cushing. In April 2020 the one-session gap between the last Friday close and the expiry-eve close was $55.90 a barrel, more than three times the contract’s own value.
The second is assuming a price cannot fall below zero. Most people treat zero as the floor, and for a share it is. For a deliverable contract whose holder must take barrels somewhere, 20 April 2020 showed the floor is lower.
A third is treating WTI and Brent as one price. Before 2011 WTI was usually the higher of the two; since then Brent has been higher on almost every day. A spread trade, or a fund that tracks one benchmark, can move very differently from the headline oil price.
A fourth is sizing oil like a stock index. A standard deviation more than twice the S&P 500’s means the same account risk buys less than half the position, and a single 1,000-barrel contract moves $1,000 per dollar.
And a fifth is holding a fund that rolls futures without reading what it holds. Every roll swaps one month for the next at whatever the curve charges, which the convenience yield and commodities pages explain.
Related
Commodities covers the futures curve, delivery and rolling that sit under every oil trade. Futures explains margin, leverage and contract months in general. And convenience yield explains why holding physical oil can be worth more than holding a contract, which is part of why the curve slopes the way it does.
Before trading an oil future, find its last trading day and put it in your calendar. The 2020 collapse happened to people holding a contract one session from expiry, not to people who had already rolled.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.