US oil futures fell below $0 on Monday for the first time in history.

samsaptaka

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This is awesome news ! I hope them sheiks go bankrupt and beg on the streets for water ! Yes you can’t drink your shitty oil can you ?
 
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Gautam Sarkar

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Arabs were acting tough guys on twitter only to get their loud mouth shut by huge drop in Oil prices. Local Abdul puncture wala, saleem tailor, zeeshan hairdresser, Mohammed denter & painter were apparently telling Arabs to stop oil supply to India.

But it's not like this is first embarrassing moment for them.... nor it will be last

KLPD.................................
Won't the price rise again by the end of this Corona virus crisis ? Until then ME is screwed.
 

Assassin 2.0

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What government of india is doing to store oil? I don't think our existing infrastructure can hold super quantities of oil?
 

ezsasa

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An useful explanier found on teetar...
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For anyone seeing the oil headlines but not the context, this is the product of a very extreme bit of market mechanics. Short version: It is a single US contract for buying oil that will lapse tomorrow, which has collapsed in price as there’s nowhere to store the oil *right now*

Extra details because people are (reasonably) asking: The specific oil contract (there is no single ‘oil price’) that has collapsed for West Texas Intermediate (WTI) crude. Most people are more familiar with Brent crude (oil from the North Sea). WTI is crude from the US 1/7

The specific contract that has plummeted in value is the WTI futures contract for May. That is effectively (I am being simplistic) a forward bet on oil prices during May. The May contract will lapse tomorrow, and be replaced by the contract for June 2/7

The June contract is fairly stable (at about $21 dollars a barrel currently). Traders have thrown in the towel on May because once the contract lapses, they have to *actually find somewhere* to put the oil. And right now, nobody has any space 3/7

Why? You guessed it: coronavirus. The pandemic has caused demand for collapse. Usually that prompts producers (i.e. Saudi Arabia, Russia etc) to cut output, to inflate the price. However, due to *geopolitics* (I am now being VERY simplistic), supply is still very high. 4/7

That means oil is still flooding into the global market as an incredible pace, but not being used up. As a result, storage capacity is quickly running out. Now, nobody wants to pay for oil they can’t store, so once this situation becomes severe, oil’s value plummets 5/7

So how can prices turn negative? Imagine you’re a US shale oil producer. Even if prices are temporarily negative, the price of stopping production is huge. That means that (for a few days at least), you might accept the pain of effectively paying someone to take your oil 6/7

It’s possible this fall may translate into slightly lower prices for consumers, but negative prices at a market in New York are not gonna translate into a bunch of oil barrels with $0 price tags on them outside the local garage. Hopefully that explains the basics! 7/7

 

Satchidananda369

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Arab Mullas around the world will soon be staring at bankruptcy with no money left to sponsor Paki Islamic terrorism while the world eventually moves on to the long suppressed Tesla over unity generators...

Meanwhile, Desperate Iranian Ayatollah attempting False Flag Hoping US Navy fired at the approaching likely explosive laden boats and the resulting panic ratchets up oil prices again.

The US Navy accused Iran's Islamic Revolution Guard Corps (IRGC) of "dangerous and provocative actions" against its vessels, which were involved in a military exercise with US Army Apache attack helicopters in international waters.

Eleven IRGC Navy vessels repeatedly approached of six US Navy and Coast Guard ships at "extremely close range and high speeds on Wednesday", the US Navy said. One passed within 10 yards (9m) of a Coast Guard cutter.

 

ezsasa

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Arab Mullas around the world will soon be staring at bankruptcy with no money left to sponsor Paki Islamic terrorism while the world eventually moves on to the long suppressed Tesla over unity generators...

Meanwhile, Desperate Iranian Ayatollah attempting False Flag Hoping US Navy fired at the approaching likely explosive laden boats and the resulting panic ratchets up oil prices again.

The US Navy accused Iran's Islamic Revolution Guard Corps (IRGC) of "dangerous and provocative actions" against its vessels, which were involved in a military exercise with US Army Apache attack helicopters in international waters.

Eleven IRGC Navy vessels repeatedly approached of six US Navy and Coast Guard ships at "extremely close range and high speeds on Wednesday", the US Navy said. One passed within 10 yards (9m) of a Coast Guard cutter.

Just so we are clear, this is american oil futures. not arab oil.
americans don't have space to store crude, arabs don't have this problem yet.
we will know tomorrow afternoon.
 

ezsasa

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Hin Leong Trading, one of Singapore's largest independent oil traders, has filed for bankruptcy amid a price war and COVID-19

 

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