carterwong
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STRIKING GLOBAL PHENOMENON!
CRUDE OIL PRICE FALL to -40 USD PER BARREL
Last Night, the WTI crude oil price chart May contract collapsed to the lowest which actually hit -40 US dollars. The latest price is currently staying at negative 4-5 US dollars.
The trend created a shock wave to the market. No one have ever seen a negative number in Crude Oil price.
This means that every time you buy a barrel of oil, you will not only have to pay, but you will also be receiving money. This sounds too unbelievable and I specifically learned something about crude oil trading knowledge, and I realized that the reason is this is:
At present situation where the global economy is shut down, no market can consume crude oil, thus oil extraction process is not necessary. Most people think is that sooner or later Covid-19 outbreak will pass and is it great if we are going to store those crude oil? The answer is no, crude oil is a volatile product and it will deteriorate if left open. It can be stored if it is sealed, but it is costly and has potential safety hazards that ordinary people cannot afford.
Currently, the commonly used method is to send the previously used oil tanker to drive over and buy a whole ship of oil then store them on the ship. However, the ship’s storage is limited, and there is too much oil need to be stored. Latest news show currently the Crude Oil stock is 160 million barrels, which record the historical highest storage and is in its ultimate critical situation.
At this time, even if the crude oil is sent to you for free, you will not be able to afford it, so there is a normal phenomenon that the future contract price is negative and the oil is sent backwards.
In addition to the May contract, the June contract also experienced a plunge, which is currently $ 15 a barrel. If global crude oil market consumption in June still stay low, the price will inevitably collapse again.
In fact, the best solution for current situation is reducing crude oil production, but the current global production is distributed in the Middle East, Russia, and the Caribbean. The related parties do not have intention on reducing production even its price dropped until so low just to preserve their income.
CRUDE OIL PRICE FALL to -40 USD PER BARREL
Last Night, the WTI crude oil price chart May contract collapsed to the lowest which actually hit -40 US dollars. The latest price is currently staying at negative 4-5 US dollars.
The trend created a shock wave to the market. No one have ever seen a negative number in Crude Oil price.
This means that every time you buy a barrel of oil, you will not only have to pay, but you will also be receiving money. This sounds too unbelievable and I specifically learned something about crude oil trading knowledge, and I realized that the reason is this is:
At present situation where the global economy is shut down, no market can consume crude oil, thus oil extraction process is not necessary. Most people think is that sooner or later Covid-19 outbreak will pass and is it great if we are going to store those crude oil? The answer is no, crude oil is a volatile product and it will deteriorate if left open. It can be stored if it is sealed, but it is costly and has potential safety hazards that ordinary people cannot afford.
Currently, the commonly used method is to send the previously used oil tanker to drive over and buy a whole ship of oil then store them on the ship. However, the ship’s storage is limited, and there is too much oil need to be stored. Latest news show currently the Crude Oil stock is 160 million barrels, which record the historical highest storage and is in its ultimate critical situation.
At this time, even if the crude oil is sent to you for free, you will not be able to afford it, so there is a normal phenomenon that the future contract price is negative and the oil is sent backwards.
In addition to the May contract, the June contract also experienced a plunge, which is currently $ 15 a barrel. If global crude oil market consumption in June still stay low, the price will inevitably collapse again.
In fact, the best solution for current situation is reducing crude oil production, but the current global production is distributed in the Middle East, Russia, and the Caribbean. The related parties do not have intention on reducing production even its price dropped until so low just to preserve their income.
