Why Oil Prices Fell Below Zero?News Update

Why are oil prices lower than zero?

In the latest sign that the global economy is in the black hole, oil prices fell below zero for the first time on Monday, the US crude oil futures fell negatively to 6.66.63 a barrel in May. In practical terms, this means that anyone who wants to receive a shipment of US crude but does not want it will have to pay someone else to take it.

How come Because we are literally running out to pour all the extra oil we are not using, because people have stopped driving, flying, or living any sign of a normal life while the country is suffering from the Corona virus-infected catatonia. Comes in the form of As the Wall Street Journal reported: "Historically low prices reflect uncertainty about what buyers will do with barrels of crude in the near term. Refineries, storage facilities, pipelines. And even the maritime tankers have been filling up fast since billions of people around the world have sought shelter in order to reduce the spread of the deadly corona virus. Helped the broker to reduce production and stabilize prices in between - good effort, good effort, I think.

Buyers are still willing to pay a positive amount for the year-end crude oil supply. June deals closed above $ 20 a barrel that day, indicating that traders expect the current downturn to be eased, either because of a further drop in production or because of their I think the economy will be slightly better by then. They just don't really want to be responsible for dealing with a bunch of hydrocarbons. This situation - when the price of a commodity in the future is higher than the current one, then it is known as contagio, by the way, and it is by no means necessary to understand what is going on, This is probably my favorite thing about a bit of financial marketing. It's like Tango, but contagious.

The problem of storage also appears to be the worst in the United States. CNN notes that investors are especially worried that the domestic industry's key transit hub, Oklahoma, is reaching storage capacity in Cushing. Brent Crowd, a variety of benchmark types that are mostly shipped to tankers, still. Trading at 25.70, probably because it has a wider market and there are still more places to store this stuff.

However, a prolonged oil spill has a devastating effect on energy jobs in the United States, while lower prices make it difficult to withstand fossil fuels to keep the cheap from melting. And if you've got a shipment of raw materials, make it a habit to say, "Take my oil, please."

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