THE OIL BOYS OF ESSEX

Over a few hours in April, a trader called Cuddles and eight of his pals from outside London made $660 million—and turned global oil markets upside down

- Liam Vaughan, Kit Chellel, and Benjamin Bain

AMONG THE MANY PREVIOUSLY UNTHINKABLE MOMENTS of 2020, one of the strangest occurred on April 20, when the price of crude oil fell below zero. West Texas Intermediate futures, the most popular instrument used to trade the commodity, had started the day at $18 a barrel. That was already low, but prices kept tumbling until, at 2:08 p.m. New York time, they went negative.

Amazingly, that meant anyone selling oil had to pay someone else to take it off their hands. Then the crude market collapsed completely, falling almost $40 in 20 minutes, to close at –$38. It was the lowest price for oil in the 138-year history of the New York Mercantile Exchange—and in all likelihood the lowest price in the millennia since humans first began burning the stuff for heat and light.

Watching this spectacle unfold were traders, energy executives, and freight company employees—whose livelihoods are tied to oil’s fluctuations. Regulators with the Commodity Futures Trading Commission in Washington stared at their monitors, stunned. “The screen was just going nuts,” Tom Kloza, an analyst at the research firm OPIS Ltd., told Institutional Investor. The experience, he said, was like watching a film by surrealist director Federico Fellini: “You’re able to appreciate it, but no one really knows what’s going on.”