For the first time in history, crude oil prices dropped to the point of entering a negative territory. This Monday, Fortune reports that the “evaporating demand and scarce storage” caused the decline to below zero. This decline means that there is a flip, with sellers effectively paying buyers to take the oil.

Late Monday afternoon, the front-month WTI (West Texas Intermediate) contract sat at $38.45/barrel. This significant drop means that the decline was at 310.45%, all in the same day. An oil analyst from the Oslo based Rystad Energy told Fortune that this is almost unreal. Louise Dickson stated, “It’s like trying to explain something that is unprecedented.”

The descent is not only remarkable, according to Fortune and Financial Times. Oil prices going into negative territory is unstoppable, with the decline happening all in one day. Analysts did acknowledge that this is due to the market’s current state, being weak that the fall is a reflection of a technical crash. It does not mean that the decline mirrors real-world trading.

The May contract, the one that the current price reflects on, will expire on Tuesday. The June contract is more reflective of the WTI price as a whole, compared to the May contract. However, the May contract is illiquid. Whoever is holding the contracts when it closes will then be forced to take delivery of barrels of oil. The oil that currently is not on-demand at all.

Bjarne Schieldrop, the chief commodities analyst at SEB in Oslo, stated that this is apparent. The 310.45% drop that caused the oil price to be at $40/barrel is more of “pure financial action.” Schieldrop’s statement supports other analysts who concluded that this is not a reflection of the true market.

Now, the June WTI contract will take effect on Monday. As an example, it settles at $20.43/barrel. This price is similar to the price derived last week. This gap between the May and June WTI sets at a point of at least $60/barrel. It is the largest gap ever seen for month’s contracts. Bloomberg reports that this reflects the market is significantly weaker in the near term. They predict that later on, it will still be in a weak state.

On the other hand, the Brent crude contract only weakened at 7.55% on Monday, and the price is currently at $25.96/barrel.

The Global oil market continues to weaken with the current state. The overproduction of oil triggered a price collapse. This oversupply also triggered a storage crisis. The storage space is now more valuable than the oil itself. Termed as “shut-ins”, the drilling and refining of oil is at a halt. With this in mind, many producers will be forced to pay to take the oil from them. In the article by Bloomberg, they mentioned that sellers in Texas are already selling crude for as low as $2/barrel.

On Monday, Rystad Energy announced the hardest-hit regions; Alberta, Iraq, and Venezuela. The U.S. Energy Information Administration said the shut-ins resulted in an estimated 1.9 million barrels/day being taken offline. The U.S. faces pressure as space in the Cushing facility in Texas is currently disappearing at a rapid rate.

Schieldrop warns that the market will become more volatile.

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