How negative oil prices revealed the dangers of the futures market

The crash in demand for oil that followed the pandemic played a major role in the move to negative prices. "At the trough, we probably saw demand in April bottom out down 30%. So we've never seen anything like this certainly in the last 40 years since world oil markets have developed," said Severin Borenstein, a professor of business at the University of California, Berkeley.

. As supply remained steady while demand struck record-breaking lows, the industry quickly began running out of storage space to put their oil. This was devastating news for investors of WTI futures who are expected to take physical possession of the oil when the contract expires. "WTI is special in a way because it's so tightly connected to physical oil," said Derrick Morgan, senior vice president of American Fuel & Petrochemical Manufacturers.

As the delivery date for WTI grew near, investors began a massive sell-off to take the contract off their hands, prompting an unprecedented crash into the negative territory.

$175/BBL 2025!! Cha ching

Кто-то верит в это?

Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen

Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.

Dow futures sink 600 points as market pullback continues, airline and retail shares declineThe early morning trading action in futures market followed a big pullback last week. The mirage is struggling to hold its form. Print more.....issue more debt.....that will help...... Who will the Trump administration trot out today to talk up the market? Or more vaccine news? Or a new multi-trillion dollar stimulus plan? The Fed was always a destructor, the public just never knew. 98% of the country doesn’t remotely understand how the financial system works, nor any rational economics, so they actually thought this Ponzi Scheme was helping them.
Herkunft: CNBC - 🏆 12. / 72 Weiterlesen »

Global Stocks Follow U.S. Markets HigherInternational markets and U.S. stock futures gained, as the Federal Reserve’s latest support for financial markets outweighed concerns about a new wave of coronavirus infections. If only the govt/fed put this much effort in propping up the American worker like they do the markets .....sigh
Herkunft: WSJ - 🏆 98. / 63 Weiterlesen »