SAJ-99
Well-known member
WOW. News says WTI May contract closed at -$37 per barrel. yes NEGATIVE $37. Something isn't right.
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WOW. News says WTI May contract closed at -$37 per barrel. yes NEGATIVE $37. Something isn't right.
someone try and explain this to me.
i remember some article from a while back where an economist theorized the possibility of this happening this spring, it was generally disregarded as certainly theoretically possible but really just a good article for grabbing clicks
i can't imagine we'd stick to negative oil prices for very long? whatever the heck that even means in practicality
unreal, in any event
Financial players have to balance their May portfolio. In this case, someone held their cards too long, hoping for a recovery.
So was New York.Shale was going broke way before covid, this just tossed them an anchor to sink faster.
who is it that was holding their cards for too long? the oil companies?
So was New York.
Awwwww, I always cheered for the roadrunner. Beep Beep
$-40.32 is the new low on the front month of crudeToday, April 20, 2020 WTI oil for May is at $10.06 . Down 40%+ from Friday close. There is a whole lot of hurt coming to the economy near you.
The short positions in the market, mostly are the producers. It's their hedge against cash prices, which are falling. so they will either deliver, if they have the wherewithall, or they will pick up their hedges at the last minutei'm confused here
is it not also as simple as may contract closes tomorrow, and it's simply readily apparent that oil ain't worth jack (actually negative jack) for May?
who is it that was holding their cards for too long? the oil companies?
i'm hearing from friends in E&P, and that on the inside, this wasn't exactly a surprise....
bear with me here, i'm actually just asking, cause this ain't my area of expertise
Cheap gas and I dont own real estate in New York. No hurt feelings here.what was the reason for the snarky come back? The truth hurt your feelings?
Anyone long the contract (users of oil) at the close of business tomorrow must take delivery. Players that are short the contract (producers selingl forward to hedge) make delivery. That sounds simple, but it isn't. If you hold the contract typically you are notified that you hold the quantity in barrels being held at a specific spot (Cushing, OK, Mildand, TX, etc) and your account is hit for the cash amount to buy that many barrels at the closing price. The reality is, very few of those contracts will get exercised regardless of who holds them. Producers don't want to deal with it, users (typically refiners) don't either, and most financial players like Hedge funds sure don't. Once the long holder takes delivery, they will have to pay the storage. Clearly if someone (the seller) is paying $37 for someone to take the long side of the contract, there is no available storage. Every product is backed up because demand has plummeted. Drillers should stop drilling, but they don't. Why the equities held up so well is a matter for debate.i'm confused here
is it not also as simple as may contract closes tomorrow, and it's simply readily apparent that oil ain't worth jack (actually negative jack) for May?
who is it that was holding their cards for too long? the oil companies?
i'm hearing from friends in E&P, and that on the inside, this wasn't exactly a surprise....
bear with me here, i'm actually just asking, cause this ain't my area of expertise
Anyone long the contract (users of oil) at the close of business tomorrow must take delivery. Players that are short the contract (producers selingl forward to hedge) make delivery. That sounds simple, but it isn't. If you hold the contract typically you are notified that you hold the quantity in barrels being held at a specific spot (Cushing, OK, Mildand, TX, etc) and your account is hit for the cash amount to buy that many barrels at the closing price. The reality is, very few of those contracts will get exercised regardless of who holds them. Producers don't want to deal with it, users (typically refiners) don't either, and most financial players like Hedge funds sure don't. Once the long holder takes delivery, they will have to pay the storage. Clearly if someone (the seller) is paying $37 for someone to take the long side of the contract, there is no available storage. Every product is backed up because demand has plummeted. Drillers should stop drilling, but they don't. Why the equities held up so well is a matter for debate.
forced delivery wil change thatAnyone long the contract (users of oil) at the close of business tomorrow must take delivery. Players that are short the contract (producers selingl forward to hedge) make delivery. That sounds simple, but it isn't. If you hold the contract typically you are notified that you hold the quantity in barrels being held at a specific spot (Cushing, OK, Mildand, TX, etc) and your account is hit for the cash amount to buy that many barrels at the closing price. The reality is, very few of those contracts will get exercised regardless of who holds them. Producers don't want to deal with it, users (typically refiners) don't either, and most financial players like Hedge funds sure don't. Once the long holder takes delivery, they will have to pay the storage. Clearly if someone (the seller) is paying $37 for someone to take the long side of the contract, there is no available storage. Every product is backed up because demand has plummeted. Drillers should stop drilling, but they don't. Why the equities held up so well is a matter for debate.
Change which part?forced delivery wil change that