Why is the oil future price negative? I don't understand why the price of oil futures went negative today.




News say it is because sellers cannot sell it. But, why don't they just hoard it until the coronavirus crisis is off? 
Why don't speculators jump in and bring up the demand again to positive?
Alternatively, I would like to get paid for receiving a barrel of oil (I can keep it in my back garden) and then sell it in the future.
I'm answering from my memory of Reddit comments like blitzkrieg9
 and AdmiralAkbar1. Don't hesitate to edit this post to link to them, but I can't remember where exactly I saw them. And I haven't just copied and pasted – I've rewritten out typos. 


  
  Alternatively, I would like to get paid for receiving a barrel of oil (I can keep it in my back garden) and then sell it in the future. 
  


Unprocessed crude oil is full of toxic and nasty stuff, and if not properly contained, many dangerous gasses like benzene or hydrogen sulfide will just evaporate out of it. You definitely don't want to be anywhere near an open swimming pool full of crude oil.

You can't really do anything with it at home, and if you dump it, you go to prison. You get nasty byproducts that you'll have trouble selling in the tiny quantities you produce, but which are illegal to dump. But hey, you might get a gallon or two of usable gas out of it!


  
  But, why don't they just hoard it until the coronavirus crisis is off?
  


Crucially, this is the price for crude oil which still has to be refined into usable products, and cannot easily be disposed of. The negative price reflects the costs associated with storing the stuff indefinitely.

And you can't turn off producing wells like a tap. It takes time to shut them down without ruining them, so that they can be turned on again. Look how long it took to get Kuwait up and running again after the first Gulf War, when the retreating Iraqis destroyed wells.

It's simple to shut in natural gas by turning the valve, as natural gas has a natural pressure. Oil does not have natural pressure. Once oil's shut in, it's not easily "turned back on". It's part of what causes wild price swings as supply can't move as fast as demand.

The leases for oil and gas in America have "shut-in clauses" where after being shut in for a certain period of time (usually one year or so, but they vary) the lease holder has to go back to the mineral owner, to re-lease. Again with gas, operations can go and turn on a gas well for a month, then turn it back off just to get enough production time to avoid the shut-in clauses. You can't do this with oil.  Even old stripper wells need about $18-20 to pay to keeping them operating.

Even if you can stop extracting oil, the oil producing countries are often in a sort of Mexican stand-off. If you produce too much, oil drops and you lose money. If you produce less, the other countries may produce more and you lose money.


  
  Why don't speculators jump in and bring up the demand again to positive?
  


A futures contract is simply a contract to buy something in the future, like next month or next year. Some futures contracts "settle to cash". This means we determine the price when I bought the contract and the actual real-world price on expiration date, then one of us pays the other person the price difference. 

But oil and most commodity contracts settle for the actual product! If you don't close out your soybean contract, your exchange calls you asking what you'd like to do with your soybeans that are waiting for you in Kansas City! Same with oil. Tankers are showing up in Houston with millions of gallons of oil and somebody needs to take delivery. Nobody can, because all the storage facilities are already full. So people are literally paying you over $30 a barrel for you to possess oil!

You're referring to a specific contract for specific delivery to an oil pipeline in Oklahoma on Apr 21 2020. That is the crux of the issue. The supply vs demand kerfuffle is very localized at a major crude oil pipeline junction in middle America. This is unprecedented. But it is a LOCALIZED phenomenon. 

What's happening now is what happened in Trading Places when the real report comes out: people realized that they overpaid for their futures and are selling to try and recoup some of their losses. There's less demand for oil right now, there's less hope of more demand for oil in May, and there's little storage space left. Low demand + high supply = low prices. A few days ago, the settlement price for a barrel of oil for futures contracts with May settlement dates was locked at ~\$18 a barrel. People expect it to be way lower than \$18 next month. So they're trying to sell off their futures contracts. It's going negative because they're literally paying you to take it off their hands if you have room for it. Although they know it'll be a loss, they figure it's less of a loss than holding onto worthless oil that they can't store.