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Megadeal fails to put the brakes on oil’s rollercoaster ride

The collapse of a US benchmark futures contract for West Texas Intermediate (WTI) to minus $37.63 a barrel ($/bbl) on 20 April made for great headlines, as markets digested the first ever negative oil price (the previous historic low was $0.10/bbl in 1931). The fall into unprecedented territory on the last day before the latest WTI contract ended was a quirk of the futures market, as producers and traders reacted to the febrile coronavirus economy in which demand has slumped and storage space is used up.

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