US oil prices crash below $0 a barrel

edition.cnn.com

31 points·doener··10 comments

https://news.ycombinator.com/item?id=22923025

This is not the real price of oil. It's just a long squeeze -- an unfortunate side effect of the USO ETF as its rolling its holdings into the next futures contract.

See: https://www.bloomberg.com/opinion/articles/2020-04-20/there-...

Absolutely a great newsletter to subscribe to. Really well written articles.

The current situation is really well explained. Basically contracts which make you owner of oil end tomorrow. you have to store it somewhere then. or sell the contract quickly for -37$ before the market closes. Article for more details.

Maybe we can start running the wells in reverse and start putting it back.

If that were possible the price wouldn't be negative. Leaving it in the ground is in fact the cheapest storage option.

It's counter intuitive to have negative prices, but I think this sums it up nicely: "If you have a thing that lots of people want, but that no one wants right now, it is hard to put a normal price on it."[0]

[0] https://www.bloomberg.com/opinion/articles/2020-04-20/there-...

Is this something localised, because Brent is still at 28 dollars.

May 2020 futures contracts for WTI (that expire tomorrow)

I'm oversimplifying it... there is so much more supply than demand that groups that can't take physical delivery of a contract (no space) and are paying to have it taken off their hands.

Better discussion here: https://news.ycombinator.com/item?id=22924321

Hey, I’ll take some money to store a couple of barrels

-$37.63. Welcome to Thunderdome.

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