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Oil trynna go negative.. Drop it like it's hot.. Drop it like it's hot..

Global demand has plunged due to global lockdown, yet oil is still gushing out of the ground.

How did we get to NEGATIVE OIL?

• Oil costs $ to store. 
• Due to the economic collapse, oil isn't being used much in a time when oil historically is more expensive (summer season, more traveling)
• So all the storage facilities are filled up. And nobody who can store it will buy it from you. If you want to get rid of oil, you have to pay someone!
• More than two dozen oil tankers are anchored on the Southern Coast of California with nowhere to unload their oil supply
  
  

What exactly was the oil contract? WTI Oil Futures contract which is settled physically.
It means whoever is long the contract when it stops trading will have to take delivery of physical crude. 

Therefore, any speculators that can’t take physical delivery have to sell these expiring contracts on the last day i.e April 20th, no matter what. Hence even selling it for -$41. 

• This is a very concerning development but it does not mean that oil is valueless, yet. The number of actual physical barrels being traded at this prices is very limited. 
• That said, this a terrible sign of whats to come. Its entirely possible that we see sub -$10/barrel spot prices all of May. 
• It could mean not so pleasant news for oil field workers and their infrastructure as well as the states who derive a large part of their income from oil revenue.

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