04-20-2020, 08:11 AM
** 20-Apr-2020 World View: Oil prices crashing with some going negative
The price of "West Texas Intermediate" (WTI) crude oil, which is
produced by shale oil drillers, fell 40% in the last few hours
to $11 per barrel.
Typical prices in the past have been $50-70 per barrel of oil. It was
falling before the pandemic, but the pandemic accelerated the fall.
What's most startling is that some oil prices have gone negative.
During the early hours of Monday morning, prices for Western Canadian
Select oil fell to $-0.15 per barrel.
The reason that a barrel of oil is worth less than nothing is
because there's such a huge oil glut in the world that there's no
place left to store it. Land-based oil repositories around the
world, and oil tankers traveling in circles at sea, are all loaded
to capacity.
Prices of other forms of energy are also turning negative. In
Germany, prices for wind and solar power turned negative on Sunday
afternoon to -26 euros per megawatt-hour.
As I described in my article yesterday, a global financial panic and
crash is caused by a chain reaction of missed debt payments and
bankruptcies. This oil price crash will force a number of shale oil
producers into bankruptcies.
This sudden, rapid crash of oil prices, even to the extent of
prices going negative because of lack of storage space,
is the kind of thing that could possibly trigger a general
panic and crash.
-- US oil prices crash to their lowest level in over 21 years as
storage run
https://www.cnbc.com/2020/04/20/coronavi...s-out.html
(CNBC, 20-Apr-2020)
-- Negative Crude?
https://global-macro-monitor.com/2020/04...ery-crude/
(Global Macro Monitor, 20-Apr-2020)
-- NWE power prices fall into negative territory for two consecutive days
https://www.spglobal.com/platts/en/marke...utive-days
(S&P Global, 20-Apr-2020)
The price of "West Texas Intermediate" (WTI) crude oil, which is
produced by shale oil drillers, fell 40% in the last few hours
to $11 per barrel.
Typical prices in the past have been $50-70 per barrel of oil. It was
falling before the pandemic, but the pandemic accelerated the fall.
What's most startling is that some oil prices have gone negative.
During the early hours of Monday morning, prices for Western Canadian
Select oil fell to $-0.15 per barrel.
The reason that a barrel of oil is worth less than nothing is
because there's such a huge oil glut in the world that there's no
place left to store it. Land-based oil repositories around the
world, and oil tankers traveling in circles at sea, are all loaded
to capacity.
Prices of other forms of energy are also turning negative. In
Germany, prices for wind and solar power turned negative on Sunday
afternoon to -26 euros per megawatt-hour.
As I described in my article yesterday, a global financial panic and
crash is caused by a chain reaction of missed debt payments and
bankruptcies. This oil price crash will force a number of shale oil
producers into bankruptcies.
This sudden, rapid crash of oil prices, even to the extent of
prices going negative because of lack of storage space,
is the kind of thing that could possibly trigger a general
panic and crash.
-- US oil prices crash to their lowest level in over 21 years as
storage run
https://www.cnbc.com/2020/04/20/coronavi...s-out.html
(CNBC, 20-Apr-2020)
-- Negative Crude?
https://global-macro-monitor.com/2020/04...ery-crude/
(Global Macro Monitor, 20-Apr-2020)
-- NWE power prices fall into negative territory for two consecutive days
https://www.spglobal.com/platts/en/marke...utive-days
(S&P Global, 20-Apr-2020)
