‘Mind-blowing carnage in US oil prices makes little sense,’ says Baker Institute expert


Jeff Falk

‘Mind-blowing carnage in US oil prices makes little sense,’ says Baker Institute expert

HOUSTON — (April 21, 2020) – Prices for U.S. crude oil for May delivery turned negative Monday — something that has never happened since oil futures began trading in 1983.

Credit: 123RF.com/Rice University

Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at Rice University’s Baker Institute for Public Policy, said “the mind-blowing carnage in U.S. oil prices makes little sense in physical terms.” He is available to discuss the implications and outlook with the news media.

“Is anyone actually going to pay $30 or $40 to get rid of a barrel of crude oil? I doubt it,” Krane said. “But with storage full, there’s no way to take delivery of these end-of-period physical shipments.

“It seems that the oil market’s trading algorithms have no way to express the deluge other than in prices run amok,” he said. “It’s a bit like the millennium bug situation come to fruition in oil markets. The contortions in the trading system aren’t properly reflecting the physical market.”


For more information or to schedule an interview with Krane, contact Jeff Falk, director of national media relations at Rice, at jfalk@rice.edu or 713-348-6327.

Related materials:

Krane bio: www.bakerinstitute.org/experts/jim-krane

Follow the Baker Institute via Twitter @BakerInstitute.

Follow the Baker Institute’s Center for Energy Studies via Twitter @CES_Baker_Inst.

Follow Rice News and Media Relations via Twitter @RiceUNews.

Founded in 1993, Rice University’s Baker Institute ranks as the No. 2 university-affiliated think tank in the world and the No. 1 energy think tank in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blog.bakerinstitute.org.

About Jeff Falk

Jeff Falk is director of national media relations in Rice University's Office of Public Affairs.