One of the more remarkable moments in financial history was seen yesterday and that is a deeply negative oil price, that is paying someone to take delivery, economists at Deutsche Bank apprise.
Key quotes
“The May contract for WTI, which started the day at $17.85, traded at -$39.55 at one point and in negative territory for a total of about six hours before popping back to $1.43 this morning. This move is all about supply and demand. American energy users and refiners do not have the storage capacity given all that is going on.”
“According to our colleague Michael Hsueh, the fact that June is currently still trading $21 per barrel should not be seen as a guarantee that this sort of price action could not happen again upon June’s expiry if demand hasn’t increased over the next 2 months.”
“Even prior to the move lower on WTI, lower quality runs of crude were near to or in negative territory, with Wyoming Asphalt Sour, a landlocked stream with higher associated costs than WTI, traded at negative 19 cents a barrel last month.”
Share
