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Oil plunges below zero for first time with May contract ending

bloomberg.com

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Re: Oil plunges below zero for first time with May contract ending

#311

Post by greenshackle2 »

refurb wrote: post #279
jliptzin wrote: post #231

Earlier quoted context omitted.

If cushing is not full, why aren't people buying at $2 a barrel now and storing for one month, selling the June contract at the same time and collecting a $20k profit per contract?

Just a guess, but maybe the consensus is that June is going to be the same (or worse) as May and they are going to have trouble unloading those contracts? It may come to the point that you're paying some to take the contract.

You're selling the June contract right now. There will be nothing to unload. Whoever is holding your June contract when it expires will be the one left holding the bag (well, the barrels). That's the whole point of futures.

The problem is that you have to store the oil for a month which is pretty expensive right now.

Re: Oil plunges below zero for first time with May contract ending

#312

Post by SilasX »

puranjay wrote: post #283
SilasX wrote: post #206

Earlier quoted context omitted.

>I am guessing that traders who are still holding on to contracts and don’t have available storage have to unload contracts pretty quickly. Good call! Now it’s about $5.30, and has dipped as low as $4.04. (Insert joke about “energy market not found”.) Edit: wow. Just wow. Below $1 a barrel and kissed $0.01 at one point! That’s gotta be a record.

I think it briefly went negative! Let's add that to the list "Things I never thought I'd see but 2020 happened"

Not briefly, it’s still negative and hit -$40.

Re: Oil plunges below zero for first time with May contract ending

#313

Post by ToFundorNot »

kietdlam wrote: post #237
tempsy wrote: post #220

Earlier quoted context omitted.

Most oil traders don’t actually want physical delivery. They are just trying to profit off price movements. Traders have moved on to June contracts already. There’s no volume on May contracts at this point. No one wants to actually pay for physical delivery so the price is tanking since there are no bids as we get closer to expiration tomorrow.

You still haven't answered the question...

I'm going to try and translate the simplest concept that tempsy is saying.

The sellers were looking to sell for most of last week, however there fewer buyers as the contract approached its end, and those who were willing to buy wanted a lower price:

Volume of transactions on Friday was 344k, Thursday was 111m, Wednesday was 147m. In the past 30 days, the low was 686k (ex Friday), and the high was 459m. Traders slowed their buying so the market became one sided.

Re: Oil plunges below zero for first time with May contract ending

#314

Post by MrGilbert »

MrGilbert wrote: post #63

I'm a software developer, which translates to being somehow smart, but I'm not that into economics: Will this have a rubber band effect? E.g., the price will skyrocket in the next 2 - 5 years, because of this?

Ok folks - I'll never ever use some kind of "joke" here again. Do you really want to discuss that being a software developer requires at least a glimpse of being "smart"? I wanted to use it in a way to express "humbleness", that's why the stress should be on "somehow".

I need a break, seriously.

Re: Oil plunges below zero for first time with May contract ending

#315

Post by askafriend »

MrGilbert wrote: post #63

I'm a software developer, which translates to being somehow smart, but I'm not that into economics: Will this have a rubber band effect? E.g., the price will skyrocket in the next 2 - 5 years, because of this?

> software developer, which translates to being somehow smart

It really doesn't. Not even a little bit. The only thing it says is that someone acquired a somewhat difficult skill.

I've met many engineers who were were great at writing software but completely clueless otherwise.

Skill and Intelligence are very different things in my view.

Re: Oil plunges below zero for first time with May contract ending

#316

Post by rjtobin »

grezql wrote: post #306
typon wrote: post #295

Earlier quoted context omitted.

I wonder if that negative int broke a bunch of code in software around the world

Son I sure hope thats not an Int. Its double, float or something else

Might be stored as an int in cents (or whatever the tick size is).

Re: Oil plunges below zero for first time with May contract ending

#317

Post by colinmhayes »

aguyfromnb wrote: post #260
jliptzin wrote: post #231

Earlier quoted context omitted.

If cushing is not full, why aren't people buying at $2 a barrel now and storing for one month, selling the June contract at the same time and collecting a $20k profit per contract?

> why aren't people buying at $2 a barrel now and storing for one month, selling the June contract at the same time and collecting a $20k profit per contract? Good question. The answer is because they don't think it will be profitable. Why aren't you ?

I've never been to Cushing Oklahoma. I feel like it should be possible to build a big tank in a week or two. Why isn't available storage space skyrocketing?

Re: Oil plunges below zero for first time with May contract ending

#318

Post by yingw787 »

lonelappde wrote: post #214
yingw787 wrote: post #73

Earlier quoted context omitted.

I pay more for a Chipotle burrito (with guac of course, can't live without guac). This is incredible.

A barrel of crude has always cost less than a barrel of burritos.

I can't drink crude without dying

Re: Oil plunges below zero for first time with May contract ending

#319

Post by lotyrin »

grezql wrote: post #306
typon wrote: post #295

Earlier quoted context omitted.

I wonder if that negative int broke a bunch of code in software around the world

Son I sure hope thats not an Int. Its double, float or something else

I sure hope "something else". I'd really like to think it's fixed precision.

Re: Oil plunges below zero for first time with May contract ending

#320

Post by jetrink »

grezql wrote: post #306
typon wrote: post #295

Earlier quoted context omitted.

I wonder if that negative int broke a bunch of code in software around the world

Son I sure hope thats not an Int. Its double, float or something else

To be doubly pedantic, it probably is an int in many places, to avoid rounding errors.
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