Crude Oil at -$35 per barrel at 20 minutes until market close 4-20-2020

[Whiskey_Bravo]

First time it has ever fallen below zero. To be honest I am not really sure what that means?


https://finance.yahoo.com/quote/CL=F?p=CL=F



Found this explanation.
https://www.barrons.com/articles/app...ys-51587411641

Oil was down more than 200% in late trading Monday. Benchmark U.S. crude oil prices were at negative $25 a barrel. There isn’t anything much new about demand, OPEC or Covid-19. The move in oil futures has to do with factors such as storage limits and expiring contracts.

Oil is a commodity, not a stock price. And futures contracts have dates for delivery associated with them. The oil-futures contract for May delivery stopped trading on Monday. The June contract is at $20, so oil will magically be at $20 Tuesday morning.

[flenna]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

[JediGuy]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

Undoubtedly. I tried it a few minutes ago didn’t work, though.

[Sam]

OK, all you economics majors, explain that to me. Mansplain it if you must. I can take it.

[ChattanoogaPhil]

What it means is the first of many unknowns and unexpected around the corner. We shut down a global economy. This is uncharted territory. Just wait for the supply chain disruption surprises to manifest.

[FromMyColdDeadHand]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

[MegademiC]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

Does the state have to pay us road tax?

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

I shouldnt be surprised, but I just got into the market and never realized how over-the top the media is about the market during times like this. Day to day volatility existed back in August and I dont recall front page headlines.

Dow opens 3%high “MARKET RALLIES!!!!”
Down falls back to opening price: “MARKET TANKS AFTER [enter some news from the day] IS ANNOUNCED!!!!!”

[whatthepuck]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

Exactly, it’s an attention-getting headline that is irresponsible. Futures contracts that will start to trade later this week will still have barrels of oil priced at $20 or so a barrel. The negative prices per barrel are futures contracts for May that are expiring very soon. There is less than 0 demand for oil now. In a month, who knows?

[Whiskey_Bravo]

OK, all you economics majors, explain that to me. Mansplain it if you must. I can take it.

Read the second link in my original post. Basically explains that these are future contract prices. May futures stop trading tomorrow. So all of the speculators that don't actually intend to take delivery of oil are selling like crazy. I am not sure if this means they are selling their futures for negative(actually paying institutions to take them) or what though. The article says that by Wednesday it will magically be up around $20 again.

[Whiskey_Bravo]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

Agreed. And yes, we are filling our Strategic reserves but evidently we can only do it to the tune of about 2 million barrels per month. We will be full in about 4 months.




I am thinking about draining my pool. If I did the math right I should be able to hold about 357 barrels.... Seems like a solid plan to me.