Today was a historical moment with prices for Crude Oil futures contract failing below 0. My question is, if you are a contract holder - can you just refuse the delivery, given that the contracts are usually delivered in at least 2 weeks time? Why do you have to sell at a negative price?


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    $\begingroup$ Tomorrow Tuesday April 21, 2020 is the last trading day for the May futures. If you are still long the contract at close tomorrow you will have to accept delivery, which will take place in May. Hence the long position is a hot potato to those who can't or don't want to get delivery. Delivery takes place in Cushing OK where apparently there is not much space,and it seems some longs are now realizing the mess they are in. $\endgroup$
    – nbbo2
    Apr 20, 2020 at 21:36
  • $\begingroup$ I get that I have to accept delivery and that there is limited capacity at Cushing. But why an option to refuse delivery at my cost doesn't exist? It would make perfect sense for both contract holder and the supplier. $\endgroup$
    – Shahin
    Apr 20, 2020 at 21:42
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    $\begingroup$ Futures = obligation, not right. the option to refuse at some cost is still there -- since you are long the futures, you can sell it at -40$ or whatever the price is. $\endgroup$
    – AK88
    Apr 20, 2020 at 23:22

2 Answers 2


The crux of the problem is that US Crude (ie WTI on NYMEX) is physically delivered; while Brent (on ICE) is cash delivered. If I'm a say WTI ETF, then I won't have any account with any registered warehouse in or around Cushing to deliver the barrels to. So I can't take receipt and just sell those via the next month contract. So I have to sell this month's contract at ANY price, because I am not equipped to physically receive the physical delivery. Which is why WTI went negative; while Brent did not.

The problem here is the inability of financial "investors" (in WTI, but not Brent) to accept physical delivery. So they must sell, whatever the price. Even if they could "refuse delivery", then that's like saying they bought their oil, paid for it, and let the vendor keep it... the vendor being able to re-sell it at a positive price, that the buyer cannot. That's no solution.


If you are long the futures contract at expiry, then yes you have to accept delivery.

It seems that many people are fascinated by the price being 0 or less. However, this is not really that strange. You still have to store the stuff, and that costs money.


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