Explainer: How did the price of oil slump to below zero dollars a barrel?

Image: John Short Image: John Short WHY ARE GLOBAL oil prices suddenly front-page news and what exactly is negative pricing?

This isn’t surprising, given flights are grounded and people are driving much less for work and leisure. Last week, major oil producers agreed to cut production of oil to prop up prices, but so far the impact has been negligible. Traders and investors who bet on oil do so in so-called ‘futures contracts‘, which have fixed time limits. Under normal circumstances, it means that they pay today to collect a certain number of barrels in the future, gambling that the price of a barrel will increase in the interim.

It’s mainly to do with WTI May future which is to be delivered. Storage at Cushing is almost at capacity. Traders who’ve bought storage won’t sell cheap so oil is dumped through the contract. The storage holders will buy negative price and sell on the June future market for $21?

This is deflationary and we could see another drop in the stock market. People who have been buying cheap stocks recently could be in for a shock

Explained: still in recession if house price is 50K they will ask you 150K - this gang Fu..ing control all- no shit about it. .. 😈

People who physically buy oil have no storage left. The futures (buying on paper) is $16 today

Free petrol? We can certainly kiss goodbye to all that ‘renewable energy’ nonsense.

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