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There are lots of ways that stock in food and energy companies could go down while prices go up. A drought or pipeline disruption come to mind.

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Absolutely. And I think the same is true for the commodities market correlates there; if memory serves correctly, crude commodity futures went negative for a break period during the supply chain volatility spike during the beginning of the pandemic.

You are correct, for oil contracts near expiration. All oil containers (in certain areas) were full, so anyone taking delivery would need a place to store the oil.

The market needed a way to transfer this risk (risk of delivery) so prices went negative meaning you were paid to find a place for the oil.

It's really neat actually and shows how almost all of the financial system is really a big "risk transfer" mechanism.

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