, Columnists
Negative Oil Is Positive for Clean Power
Electricity markets were built for this sort of thing.
This article is for subscribers only.
One word explains oil’s recent crash to negative prices: inertia. Those barrels in the pipeline, and the forces that put them there, don’t respond quickly to sudden change. Supertanker symbolism aside, that matters in a real way for a defining competition of the energy transition: oil versus electricity.
Investors paid to offload their oil futures on April 20 because they couldn’t take physical delivery of the barrels. Oil is toxic; bring some home and it could kill you. If tanks aren’t available or too expensive — because, say, a pandemic has led to a rush of spare barrels into storage — then you’ll pay someone to take it.