Скачать с ютуб The Day Oil Prices Went Negative – Negative Oil Prices Documentary в хорошем качестве

The Day Oil Prices Went Negative – Negative Oil Prices Documentary

There have been many strange events in financial history, but perhaps the strangest of them all was the day that oil prices went negative and the whole oil market was turned upside down. On April 20th, 2020 the price of US west texas intermediate crude oil crashed nearly 300% in a single day and closed at negative 37 dollars a barrel. You heard that right, the price of an oil barrel was negative 37 dollars. You might be wondering what negative prices even mean – after all, it’s not something you would ever see on a price tag in a store. Well, negative oil prices meant that anyone who wanted to sell a barrel of oil would actually have to pay the buyer $37 in order to get them to take the barrel of oil. So not only could buyers get oil barrels for free, but they were actually getting paid to take the oil from the seller. In other words, oil demand was so low, people were literally paying people in order to get rid of their oil barrels. This complete collapse of the oil market in a day was absolutely unprecedented and is something that most people would never have considered as even being possible. Oil, like most things in the economy, is governed by supply and demand. As supply and demand change, the price of oil will change accordingly until it finds its new equilibrium point. And in 2020 during the early parts of the Covid-19 pandemic, oil had everything going against it. As countries shut down, oil demand cratered in a way that had never been seen before. Oil demand fell nearly 30% by April of 2020 as transportation slowed to a crawl and hit oil prices hard due to much lower demand. But to make matters even worse for oil prices, supply was extremely high as the Organization of Petroleum Exporting Countries, better known as OPEC, failed to reach an agreement on oil supply cuts which led to a price war between Russia and Saudi Arabia which flooded the markets with millions of extra barrels of oil per day. With oil producers flooding the market with tons of excess supply into a historically low demand environment, Oil prices were falling fast. But on April 20th, 2020 the entire Oil market finally cracked. The thing about millions of barrels of oil is that they take up a ton of storage space. And with high supply and extremely low demand, the oil industry was actually starting to run out of convenient storage space for oil. Cushing Oklahoma in the United States is one of the main hubs in global oil trade and is a main storage location for US oil with approximately 76 million barrels of storage capacity. It’s also the location where all the barrels of oil being bought and sold through futures contracts for west texas intermediate crude oil, better known as WTI, actually get delivered. So all futures contracts for WTI crude oil get delivered to Cushing. Normally the 76 million barrels of storage capacity is plenty of storage to handle the delivery and settlement of futures contracts. But in April of 2020, Cushing already had about 70% of its storage capacity filled and the remaining storage was filling fast. And the pipelines that move oil out of cushing were working at max capacity already. So as the delivery date for the April futures contracts of WTI crude oil drew near, commodities traders were scrambling because there was a shortage of available storage and they had nowhere to put the oil. Many of these commodities traders had no intention of actually physically buying or selling thousands of barrels worth of oil in the first place since they were incapable of storing it, so they scrambled to get out of the futures contracts through any means necessary. This rush for the exit on these contracts began a massive sell off in the April WTI crude oil futures contracts which crashed into negative pricing territory as traders were forced to pay other people to take the responsibility of receiving the physical delivery of the thousands of barrels of oil on delivery day. Normally traders can exit these futures contracts at a positive price since oil is valuable and people generally want and need oil for lots of things, but the oversupply and storage problem was so dire on that particular day in April that oil actually had negative value on the open market as nobody wanted to take delivery. Because of this, the futures contracts closed around -37 dollars per barrel for the April WTI contracts that day. Negative oil prices in 2020 were an extraordinarily strange market event and one that may never even be seen again. The phenomenon was driven by a very unique set of circumstances surrounding the Covid-19 pandemic, oversupply, and storage limitations. Although the negative prices were an anomaly, they are a valuable reminder that crazy things can occur in the market when supply and demand imbalances are combined with unexpected black swan events.