US crude oil is suddenly worth negative money

  • Start date
  • •
  • Replies 9 Comments
  • • Views 737 Views

Matty

Bringing Sexy Back
Since
Jan 26, 2010
Messages
49,397
Score
5,279
Tokens
0
😮


Screenshot_20200420_144127_com.android.chrome.jpg
 
Saw this. Kinda weird my ZCash is worth more than oil.
 
Should gamelive go in on a barrel or two?
 
Does this mean that during the coronavirus, essential oil is now more important?
 
No one is driving or flying. Low demand and a high supply.

That reminds me - don't get high on your own supply.
 
"West Texas Intermediate crude oil futures for May delivery cratered by 305 percent to -$36.73 a barrel. "

That is a very specific product. It's not the price of the oil, per say, It is the price of a contract to take delivery of oil from a certain source at a certain time.

All the oil storage facilities that this grade can reach are full now (landlocked, so tankers aren't an option), so the last thing anyone wants is to have a contract on their hands saying they will take delivery of something they have nowhere to put.

When mid-may arrives, the people who are left holding these contracts with nowhere to put the oil will need to reneg on them, and end up paying penalties. Thus the "paying people to take the contracts off your hands" part.
 
Last edited: