Oil prices go deeply negative

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ORIGINAL POST

Posted by Ed 5 yrs ago

U.S. oil futures prices fell to their lowest-ever level by far on Monday, at -$37.63 per barrel, meaning owners of the futures contracts were paying to offload them.

It broke the previous low price record near $10 a barrel set in 1986 and comes as policymakers struggled to address the glut of crude that has seen the industry reverse a decade-long boom and sink into a deep recession that threatens to push dozens of companies into bankruptcy.

Ed 5 yrs ago

Energy Equities Hang On Despite Negative Oil Price

In a historic Monday for crude prices, energy-exposed equities didn’t quite crater as some may have envisioned.

The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory -- minus $37.63 a barrel. Yet the S&P 500 Energy Index fell just 3.3%, the most since last Thursday, and even posted a brief gain earlier in the session.

Leading decliners Occidental Petroleum Corp. and Pioneer Natural Resources Co. posted drops in the single digits. In Canada, Toronto’s energy gauge fell 0.6%.

Traders are getting off of the May contract “at all costs,” said Patrick O’Rourke, an analyst at AltaCorp Capital. Equities might be pricing in some form of recovery, while a risk remains that the June crude contract could trade similar to May’s, O’Rourke said.

Ed 5 yrs ago

Oil Plunges Below Zero for First Time in Unprecedented Wipeout

Of all the wild, unprecedented swings in financial markets since the coronavirus pandemic broke out, none has been more jaw-dropping than Monday’s collapse in a key segment of U.S. oil trading.

The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory -- minus $37.63 a barrel.

The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that energy companies have run out of room to store it.

And if there’s no place to put the oil, no one wants a crude contract that is about to come due.

Ed 5 yrs ago

Holy WTF Moly: WTI May Contract Collapses to Negative -$37

It’s not often that we’re served up a WTF moment like this. Just about a couple of hours ago, I published my article about US crude-oil benchmark grade West Texas Intermediate (WTI) and how the May futures contract for it collapsed by 45% to $10 a barrel — US Crude Oil Gets Annihilated Under Targeted Saudi Attack — and I pointed at some of the dynamics. But WTI kept plunging.

This is the near-month May futures contract, which expires tomorrow. It should normally trade close to the spot market price, but has now divorced from it.

It has continued to collapse in a breath-taking pace to $8 a barrel, then $4, then $2, then $0, then below zero, then at -$10 and then… and now settled at negative -$37.63 a barrel:

https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=1c2f1501-f508-4d2f-9d99-7ef7062b1b3e&refreshStamp=0

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