04-21-2020, 10:00 AM
** 21-Apr-2020 World View: Price of oil
I just heard that the price of oil is $10 per barrel in the June
contract. Even at $20, there will be lots of bankruptcies among oil
producers, and lots of losses among banks and hedge funds. Tens of
thousands of people will lose their jobs.
I just heard a news report that the prices of used cars are
plummeting. This is all because of the economic shutdown. Even if
some of the lockdowns end, these price collapses will continue for
many months. This is a classic deflationary spiral, like the 1930s.
Xeraphim1 Wrote:> "There are mitigating circumstances to these insane numbers. The
> prices for WTI reflect the contract for May, which expires this
> week. The collapse is a reflection of traders abandoning the May
> contract, and moving on to June. The thinly-traded May contract
> loses some relevance, and analysts say that the June contract –
> trading at $20 per barrel as of Monday – now becomes the important
> number to watch."
> It's a weird thing, but doesn't mean as much as you might
> think.
I just heard that the price of oil is $10 per barrel in the June
contract. Even at $20, there will be lots of bankruptcies among oil
producers, and lots of losses among banks and hedge funds. Tens of
thousands of people will lose their jobs.
I just heard a news report that the prices of used cars are
plummeting. This is all because of the economic shutdown. Even if
some of the lockdowns end, these price collapses will continue for
many months. This is a classic deflationary spiral, like the 1930s.
