Oil traders and fossil executives whose livelihoods rise and fall on the price of oil were in a state of collective shock earlier this week, as plummeting demand due to the coronavirus pandemic drove ricocheting prices well below zero for the first time ever.

“Of all the wild, unprecedented swings in financial markets since the coronavirus pandemic broke out, none has been more jaw-dropping than Monday’s collapse in a key segment of U.S. oil trading,” Bloomberg reported earlier this week. “The price on the futures contract for West Texas (WTI) crude that is due to expire Tuesday fell into negative territory—minus US$37.63 a barrel.

“That’s right, sellers were actually paying buyers to take the stuff off their hands.,” the news agency continued. “The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American [fossil] energy companies have run out of room to store it. And if there’s no place to put the oil, no one wants a crude contract that is about to come due.”

Reuters had the price for WTI bottoming out at -US$40.32 before bouncing back slightly. Brent Crude, the European benchmark price, was down $2.51, to US$25.57 per barrel.

“I understand the price of West Texas Intermediate is at -$37.63,” snarked a friend of The Energy Mix, who asked not to be identified by name. “I’d like to order one billion barrels, please. Below is my bank account for deposit of the $37,630,000,000.00 as my rebate for buying this stuff.”

But there was actually a less entertaining explanation for what’s going on.

Oil prices are constantly shifting up or down, with buyers and sellers negotiating larger contracts weeks in advance based on where they expect the price will land on the day they have to deliver or receive the actual, physical product. It’s a futures contract—that’s why a final price for a barrel of oil in May was locked in April 21, and why the Bloomberg report on Monday had traders setting a contract price of $20.43 for June. The higher price was a measure of how far they expected oil consumption to increase and the storage crunch to ease in the next month—as of Monday, at least.

For decades, any hint of an oil price shock that could limit supply—a natural disaster, the threat or reality of a regional war, or a meeting of the OPEC oil cartel—could drive prices higher.

But now, the market is being roiled by collapsing demand. With pandemic lockdowns driving consumption into freefall, fossils are stashing their surplus anywhere they can, even paying up to $180,000 per day for “floating storage” on colossal, two-million-barrel oil tankers anchored at sea. The massive storage and trading depot in Cushing, Oklahoma is expected to reach its maximum capacity in the next month, The Canadian Press wrote.

“Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to slow the spread of the novel coronavirus,” Reuters explained. “Refiners are processing much less crude than normal, so hundreds of millions of barrels have gushed into storage facilities worldwide. Traders have hired vessels just to anchor them and fill them with the excess oil. A record 160 million barrels is sitting in tankers around the world.”

That means epic losses for anyone who bought oil at a higher price, expecting to sell it for a profit, only to have the short-term or “spot” price of that product collapse before their eyes.

“If you’re a seller and you’re desperate to get rid of the contract, you’re willing to pay somebody to take it off your hands,” Martin King, senior analyst at RBN Energy, told CP. “And if you’re willing to buy the contract, you want to be compensated for what could be enormous risk and not being able to deliver those barrels or store those barrels. So you want to be paid to take that contract.”

“Pricey shut-ins or even bankruptcies could now be cheaper for some operators, instead of paying tens of dollars [per barrel] to get rid of what they produce,” Rystad Energy oil markets analyst Louise Dickson told Reuters.

It all means that “the May crude oil contract is going out not with a whimper, but a primal scream,” said oil historian Daniel Yergin, vice chair of energy analysis firm IHS Markit.

And Michael Tran, managing director of global energy strategy at RBC Capital Markets, saw little chance that anything will change soon. “Refiners are rejecting barrels at a historic pace, and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former,” he told Bloomberg.

The price collapse had fossils shutting down 13% of their exploration drilling in the last week. On Tuesday, a follow-up report by Bloomberg pointed to the June selling price for oil heading downward, as well. “The collapse of later contracts underscored the severity of the crisis rocking oil in the age of coronavirus,” the news agency said. “Storage tanks, pipelines and tankers are rapidly being overwhelmed by a vast oversupply.”

By Tuesday, the market downturn had Canadian fossils renewing their demands for a C$30-billion government bailout. “It all bodes ill for Canada’s struggling oil and gas industry, which is being injected with $2.45-billion-plus of federal money to save corporations and their work forces from the worst economic effects of the COVID-19 crisis,” the Globe and Mail wrote. “The call for more aid is already growing, three days after the package was announced.”

“Our expectation is that government will continue to evolve their programs as we’ve seen them do for other businesses and citizens,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers. The Toronto Star said CAPP is looking for government guarantees for fossils’ bank loans and “a new credit structure available to all business sizes”.

“Our customers are concerned because they’re selling their oil and gas products right now into markets that are volatile and quite low priced,” Kevin Neveu, CEO of Calgary-based Precision Drilling Corporation, told the Star. “Access to capital is completely turned off. We’re seeing more and more news of companies that are failing and have to restructure their debt. I think we’re sliding down into a deep, deep collapse of the industry right now.”

The Globe and Mail’s Jeffrey Jones agreed. “Negative oil prices may be the talk of global energy markets this week, but corporate red ink and its effects will be around long after the novelty wears off,” he wrote. “The question is how many companies can hold on while that happens and cash flow dries up, even with government support providing a life support for wages, environmental cleanup, and credit guarantees.”

The National Post had several fossil executives complaining that last week’s $2.45-billion federal announcement wasn’t to their liking.

“This is not going to do anything,” said Whitecap Resources CEO Grant Fagerheim. “If this is as good as it gets, it will do very little or nothing to assist with operations for companies.”

“I think they made the calculation that it would be politically unpalatable in Ontario and Quebec to provide direct supports to oil and gas,” said another fossil exec who declined to be identified.

But “Ottawa has already rolled out a host of programs aimed at aiding private companies, including a cross-economy wage subsidy program expected to cost around $73 billion,” the Post noted. “Firms can also apply for lines of credit through the Business Development Bank of Canada and Export Development Canada. The EDC and BDC on Friday said they would expand their current lending program for oil and gas companies, which currently allows for small loans between $15 and $60 million to cover operating costs.”

But the deeper problem is that there’s no immediate demand for the product, no clear sense of when or to what extent demand will return—and Richard Masson, an executive fellow with the University of Calgary’s fossil-affiliated School of Public Policy, said Canadian producers can’t shut down operations completely without damaging oil reservoirs.

“We’re going to find that we just have no place to put it,” he told the Toronto Star. “So we’re likely to experience negative prices over the next few weeks because it takes time to slow down production, and demand just dropped off a cliff.”

Meanwhile, “should the global freeze on movement stretch into September, things could get ‘very ugly’ in Alberta—mass layoffs, companies shutting down, and conglomeration,” the paper adds, citing Masson.

Even before the oil price went below zero, the unprecedented situation had analysts speculating that previously “untouchable” shareholder dividends from Canada’s biggest, most financially stable fossils might be at risk.