General

Can commodity prices go negative?

Yes, for commodities like Crude Oil, prices can technically drop below zero in the international markets. In such rare cases, ICICI Direct may initiate early settlement (EOS) or close positions based on MCX/SEBI circulars.

Crude oil prices went negative for the first time in history on April 20, 2020, when the West Texas Intermediate (WTI) May futures contract plunged to around -$37 per barrel due to the  COVID-19 pandemic  causing near-zero demand and overwhelming oil storage capacity, forcing sellers to pay buyers to take the physical oil.