Financial encyclopedia

In April 2020, we witnessed history: the New York WTI crude oil futures once dropped to a "negative" value. At that time, the situation was that the pandemic led to a sharp decline in demand, there was so much oil that there was no place to store it, and people were forced to pay to have the goods taken away. 

But today in 2026, the market is brewing a completely different kind of risk, "an extreme deviation between price and reality". 

2020 vs 2026: Completely Different Scripts
2020 "Negative Oil Prices":
Core issue: Demand vanished, inventories saturated, and no one was willing to take delivery.
Result: Prices collapsed to negative territory. 

Current Risk in 2026:
Core issue: Stable physical demand (especially in the Asian market), but futures prices are depressed due to policy and financial capital influence.
Result: A significant "disconnection" occurs between spot and futures prices. 

Why is it more dangerous when "prices are depressed"?
Currently, the market has noticed that the position size of some futures contracts that are about to expire is extremely large. Under normal circumstances, investors would choose to "roll over", that is, sell the old contract and buy a new one, rather than make physical delivery. 

But now a key variable has emerged: If the futures price is artificially depressed by financial factors, far below the true spot value, the buyer will tend to choose "physical delivery" to lock in low-priced resources. 

When a large number of buyers no longer play the digital game but demand "to take the real oil away":
1. The delivery system will face tremendous pressure.
2. Inventory and logistics may instantly collapse.
3. The ultimate outcome: The price may not continue to fall but instead may experience a "violent" return to fundamentals in a short period of time. 

When the figures in the financial market (futures) fail to reflect the real-world demand (spot), the market will eventually be forced to reprice. And this "calibration" process is usually accompanied by extremely high uncertainty and sharp fluctuations.