04-20-2020, 02:10 PM
** 20-Apr-2020 World View: Oil prices continue crashing
Oil prices have continued to crash all day, and WTI crude prices are
now negative, mainly because of storage problems, as described above.
These prices are for oil to be delivered in May on the futures market.
Notes from an al-Jazeera report:
In the last week, half the oil rigs in Texas have gone out of
business, from over 800 oil rigs to about 400.
The oversupply is 35 million barrels a day. Saudi Arabia and Russia
recently agreed to cut supply by 10 million barrels a day, which is
too small a cut.
Oil produced in other countries are not yet as badly affected because
the storage issues aren't as bad as in the US.
Al-Jazeera just reported that oil is now at $-40 per barrel. If
that's correct, then it looks like a real disaster in the making, as
it implies that oil producers are going to have oil on their hands
with no place to store it.
However, another analyst has come on with a soothing, calming voice,
saying that the US government has some storage locations available,
and can buy up the excess oil. This soothing analyst says that the
May contract is closing today, and the June contract opens tomorrow,
and prices will return to $+20.
Oil prices have continued to crash all day, and WTI crude prices are
now negative, mainly because of storage problems, as described above.
These prices are for oil to be delivered in May on the futures market.
Notes from an al-Jazeera report:
In the last week, half the oil rigs in Texas have gone out of
business, from over 800 oil rigs to about 400.
The oversupply is 35 million barrels a day. Saudi Arabia and Russia
recently agreed to cut supply by 10 million barrels a day, which is
too small a cut.
Oil produced in other countries are not yet as badly affected because
the storage issues aren't as bad as in the US.
Al-Jazeera just reported that oil is now at $-40 per barrel. If
that's correct, then it looks like a real disaster in the making, as
it implies that oil producers are going to have oil on their hands
with no place to store it.
However, another analyst has come on with a soothing, calming voice,
saying that the US government has some storage locations available,
and can buy up the excess oil. This soothing analyst says that the
May contract is closing today, and the June contract opens tomorrow,
and prices will return to $+20.
