Updated at 3:25 p.m. ET
For the first time ever, a key U.S. oil benchmark, West Texas Intermediate, went below zero on Monday as traders approach a deadline to find buyers.
That means some traders, instead of paying money to buy oil, are paying to get rid of it.
The unprecedented shift comes as global oil markets continue to grapple with a pandemic-driven collapse in demand.
At the start of 2020, a barrel of WTI cost around $60. Prices had dropped swiftly because of the coronavirus, landing at around $18 a barrel on Friday.
Then on Monday they plummeted through the floor. And kept going. WTI for May delivery settled at a negative $37.63 — meaning traders are paying $37.63 to get someone to accept a delivery of a barrel of oil.
The plunging price of WTI is driven by a trading contract deadline; oil traders have until Tuesday to sell off the current futures contract. And they need buyers that are capable of receiving and storing that much oil. Clearly, those buyers are in short supply.
Other types of crude, without a deadline coming up that quickly, have not dropped nearly so sharply.
But in general, crude oil prices are very low and continue to fall. Brent, an international benchmark, is in the mid-$20s and fell more than 9% on Monday.
Oil-producing countries and companies are trying to reduce their output, but they can't keep pace with the extremely rapid drop in global demand as the world economy hits the brakes.
That's creating a massive oversupply of oil and raising concerns about where buyers will be able to physically store it all.