Should You Buy Oil Stocks Now?

Futures for West Texas Intermediate crude oil fell below zero on April 20, bottoming out below negative-$38 per barrel. In other words, traders were paying buyers to take the contracts. And while yesterday's disaster was partly a bizarre quirk of timing -- the contracts were for early May deliveries, and many of the traders didn't have storage lined up and had to pay others to take the contracts off their hands -- it was also an indicator just how incredibly imbalanced the supply and demand sides of the oil industry are.

Even after yesterday's bloodbath, oil futures are still very beaten down. June West Texas futures are trading below $14 per barrel at recent prices. Brent, widely considered the most important global benchmark, is down 25% today, with June contracts below $20 per barrel at recent prices.

Some of the biggest names in the business are taking a beating. Shares of oil producers Occidental Petroleum (NYSE: OXY) and ConocoPhillips (NYSE: COP) are down 74% and 50%, respectively. Oil-field services giant Baker Hughes (NYSE: BKR) stock is down by half. Even integrated giants like ExxonMobil (NYSE: XOM), Royal Dutch Shell (NYSE: RDS.A)(NYSE: RDS.B) and Phillips 66 (NYSE: PSX) have lost more than 40% of their value.