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Illustration: Aïda Amer/Axios

U.S. crude oil prices have soared by almost $35 per barrel since the troughs of Monday afternoon, moving all the way back to around negative $5 this morning.

Why it matters: Those numbers for West Texas Intermediate future prices aren't typos, and they reflect the wider tumult in the oil industry encapsulated in yesterday's first-ever negative futures prices.

  • The coronavirus pandemic is causing an unprecedented demand crash, so storage infrastructure is filling fast.

The big picture: The historic price collapse reflects two things at the same time.

1. More narrowly, it was about the calendar as the expiration of the May futures contract looms today. Speculative traders and companies were rushing to unload contracts for May delivery, but with the oil unwanted, they had to start paying to get rid of them.

  • "[W]ith adequate storage in Cushing [Oklahoma] unavailable to those who need it, selling intensified in the May futures contract," Wood Mackenzie analyst Ann-Louise Hittle said in a note.
  • "This issue is most intense for May WTI because oil demand is at its weakest."

2. Stepping back, yesterday's march into the unknown shows just how much the world's energy landscape has been turned upside down as the pandemic shuts down huge amounts of travel and business activity.

  • The over-saturation might be eased somewhat when cuts by OPEC+ nations begin next month and production falls elsewhere too, but it won't be enough to compensate for demand loss for a while.
  • Consider that prices for the global benchmark Brent crude are in free fall this morning too, as are prices for June delivery of WTI.

The bottom line: "Some may dismiss Monday’s fall into negative WTI prices as a quirk of the futures market on the last day before a contract ended," IHS Markit analyst Jim Burkhard said in a note.

  • "But the fact that prices went this low at all reflects brutal market forces that will not disappear with the expiration of a single monthly contract," Burkhard adds.
  • Bloomberg sums it up nicely, noting the negative prices reveal a "fundamental truth" about oil during the pandemic.
  • "The world’s most important commodity is quickly losing all value as chronic oversupply overwhelms the world’s crude tanks, pipelines and supertankers," they report.

Go deeper

Ben Geman, author of Generate
Jul 29, 2020 - Energy & Environment

Trump heads to Texas oil patch as “dominance” agenda teeters

Data: FactSet; Chart: Axios Visuals

President Trump will tout his policy of "restoring energy dominance" in Texas oil country Wednesday, but market forces, OPEC and a raging pandemic are complicating his plans.

Driving the news: Trump's swing through the state today includes a visit in Midland to a Double Eagle Energy oil rig and speech on energy, and a fundraiser in Odessa.

Jul 30, 2020 - Health

The deep decline in vaccine sales

GSK's Twinrix vaccine. Photo: Sven Hoppe/picture alliance via Getty Images

Global stay-at-home orders stemming from the coronavirus pandemic — especially those in the U.S. — have led to steep sales declines in routine vaccinations.

The big picture: Although more people are getting their vaccines now, "there remains some way to go to get back to pre-COVID levels for adult vaccinations," GlaxoSmithKline CEO Emma Walmsley said on an investor call Wednesday.

Jul 29, 2020 - Health

GOP Rep. Louis Gohmert tests positive for coronavirus

Louis Gohmert was questioning Attorney General Bill Barr on Capitol Hill Tuesday. Photo: Matt McClain-Pool/Getty Images

Rep. Louis Gohmert (R-Texas) tested positive for COVID-19 during a pre-screening at the White House on Wednesday, Politico reports.

Why it matters: Gohmert, a fierce defender of President Trump and member of the House Freedom Caucus, has been walking around the Capitol without a mask and attended Tuesday's hearing with Attorney General Bill Barr. The 66-year-old congressman was supposed to travel with Trump to Texas on Wednesday.

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