Visiting Assistant Professor Mazen Labban's new article in The American Prospect analyzes the collapse of the global oil market during the ongoing coronavirus pandemic.
Mazen writes: "The price of oil is an abstraction. When it plummeted to -$37/barrel on April 20, we can be sure that not many actual barrels of oil in physical markets traded at that seemingly irrational price, though some were offered at prices below zero. That plunge was in the price of a hypothetical barrel of crude oil represented in a financial instrument, a derivative traded in financial markets like the New York Mercantile Exchange (NYMEX): the West Texas Intermediate (WTI) Light Sweet Crude Oil futures contract for delivery in May. Clearly, the trading that influenced the movement of prices is by speculators who had no intention of taking the oil."
Check out Mazen's book, Space, Oil and Capital, for his more foundational analysis of the relationship between the production of oil and the process of inter-capitalist competition in the global economy.