Doesn't make sense at all. Speculators have to be confused? How do you buy a commodity that has negative value? How could you ever push the price back up?
Price goes back up when either demand rises or production falls. If I had an empty oil tanker I'd forgotten about until now, I'd certainly fill it with some -$35 oil, and wait until the price improves. barfo
Seems like the answer is simple. Since the covid is gonna extinct us anyway, we should just burn the stuff as fast as possible and store it in the atmosphere like our original plan, just quicker.
Just saw on CNBC say that it would cost you and additional $35 just to store the oil. Don’t understand that concept.
Trying to wrap my mind around this; I suppose someone who bought the oil previously in a futures contract but had no way to physically store it. They are in a contract to exchange cash for oil in May and the contract is finalizing today. They probably planned to sell at a profit when prices increased, however prices never increased. Now they need to buy storage for their item or sell the product. The price to sell (dispose) of it is $35 a barrel. If they don't fulfill the contract the trading platform cancels their account and takes their cash reserves. So they cant just walk away from the initial futures purchase.
The govt should buy it up and use it to blacktop roads and fix some infrastructure long overdue....treat railroad ties, whatever. Use it to create jobs would be a thought
Awe okay that makes sense now. Was wondering how it cost an additional. So they put a receipt for x amount of future barriers. Then the barrels drop to zero, so they owe the invoice price + $35 per barrel storage.
I could start my own Labrea tarpit attraction to get some tourist bucks....fill a hole with oil and sink some madrone branches into it to look like dinosaur bones! Visit riverman pits! 20 dollar admission...babies free!
I had a 3 week road trip planned for next month. My plans were to visit Nashville, Memphis and the Mississippi Blues Trail. It was bad enough that I had to cancel it but I’m even more pissed now that gas is so cheap. It was over $3 a gallon when I planned the thing. The savings would have bought a lot of beer on the road. But then, they’ll buy a lot of beer at home too, I guess........
lmao, for what? US already is the largest producer of crude oil, in a foolish push by Trump to start producing more. We already have too much supply and not enough demand, and our dumbass president doesn't understand the basics of economics.
If you are going to give away babies you are going to have to keep a lot of women pregnant to keep up with the demand. This scheme seems very labor-intensive. barfo
He tried to buy a month ago when prices wrench higher, to stock the reserves. Was blocked by Democrats, I believe. Art of the deal?
Yep, congress can screw up any deal. They control funding and they (House Democrats) refuse to give the President a win, so...
A win? Spending over 2 billion dollars on something that could at 1 per barrel be had for 77 million just 1 month later would have been a win? That's some fun math
