Negative oil, negative consequences. As I said:
So, West Texas Intermediate crude just (if briefly) traded in NEGATIVE territory – meaning nobody wants the oil and they have to pay people to take it. Free-loading Amerikants might think that’s a good deal, especially for gasoline. And, it will be – while current supplies last. Then, we find out what happens when there is no profit in gas or oil at any price. My guess is that it means a shortage.
The next chapter:
The economic impact of the coronavirus has ripped through the oil industry in dramatic phases. First it destroyed demand as lockdowns shut factories and kept drivers at home. Then storage started filling up and traders resorted to ocean-going tankers to store crude in the hope of better prices ahead.
Now shipping prices are surging to stratospheric levels as the industry runs out of tankers — a sign of just how distorted the market has become.
The specter of production shut-downs — and the impact they will have on jobs, companies, their banks, and local economies — was one of the reasons that spurred world leaders to join forces to cut production in an orderly way. But as the scale of the crisis dwarfed their efforts, failing to stop prices diving below zero last week, shut-downs are now a reality. It’s the worst-case scenario for producers and refiners.
Might not be a best-case scenario for drivers either.