/biz/ - Business & Finance

[Anonymous No.18576152]

>negative value
someone pls tell me how this shit works i'm retard
could i literally just take a barrel of oil rn and get paid ten bucks

[Anonymous No.18576243]

>>18576152
turns out we've been paying to dispose of toxic waste this whole time.

[Anonymous No.18576815]

>>18576152
Literal barrels aren't included, even if you could fill up your fucking bathtub with it you'd end up with like 20$ worth once it goes back up.

[Anonymous No.18577178]

>>18576152
It means oil i been produced has exceeded storage capacity. It means that oil can no longer pay for it's storage and now companies have to pay for storage that exceed the liquid's value.

[Anonymous No.18577227]

>>18576152
Basically, theres a storage problem. They have too much oil and nowhere to put it. So they're paying people to take it off their hands. The problem is its only worhtwhile if you can store tens of thousands of barrels and have a way to transport it.

[Anonymous No.18577279]

>>18576152

[Anonymous No.18577321]

>>18576152

[Anonymous No.18577452]

>>18576152
"The headline number that everyone is freaking out over is the front month contract. Right now that's the May contract. Trading in this contract will end tomorrow, April 21, and delivery of physical crude will be in May.

In the normal course of events traders holding this contract about now would be selling it to someone will to take physical delivery and then roll the income from that sale into a later contract.

RIght now, however, no one wants to (or is able to) take physical delivery. Storage is near full. So no one want this contract, hence the crash in pricing.

On Wednesday the headlines will report a 50% jump in crude prices because the headlines always refer to the front month price. And on Wednesday the front month contract will be the June contract.

As for USO, they try to hold the front month contract, but they don't hold it to the very end. This month, USO started to roll to the June contract on 7-April and were done by 13-Apr. So they missed this crash.

Also, note that because USO has gotten so big they are no able to hold all their assets in the front month contract. It would violate exchange rules. Going forward USO will hold only 80% in the front month and 20 % in the next month."

>could i literally just take a barrel of oil rn and get paid ten bucks
To answer this specifically the contract is for 1000 barrels. Barrel is a measurement not the container. You have to have a place to put the oil when it's delivered so no: get that silly dream out of your head anon

[Anonymous No.18577486]

>>18577178
So you stop the pumps for a while and let it cool down?

[Anonymous No.18577493]

>>18576152
Master degree in Economics.

Negative prices generally do not exist in most markets. Oil is different.

Oil has all sorts of crazy competition structures, oligopolistic, with a lot of "games" being played among producers. Also, the production chain of oil is complex and once you decide to produce it, it takes a while to interrupt the production. Also, storing it is expensive, since it is flammable, liquid, etc..

So, put all this togheter:

(1) No demand due to coronavirus
(2) Fracking production from US skyrocketed
(3) Price war between Russia and Saudi Arabia

And suddenly you got what you see today, a bunch of producers competing instead of cooperating in cartels, and NOWHERE to stock it. And you can't just throw it anywhere.
So they are literally paying who can store it.

[Anonymous No.18577512]

>>18577452
by the time they try and find me so they can force me to take their oil, i've already disappeared with my -$10 into the sunset

[Anonymous No.18577546]

>>18577486
Stopping the pumps has a good chance of dumpstering the deposits

[Anonymous No.18577561]

>>18577486
more than likely yes. except the oil companies are not working as a cartel so the price has lowered.
Basically MExiCO WILL RAPE YOUR SHIT

[Anonymous No.18577612]

>>18577493
Thanks a bunch for the information. Any specific stocks you're watching to jump on?

[Anonymous No.18577694]

>>18576152
>could i literally just take a barrel of oil rn and get paid ten bucks
You'd need to pay for the shipping.

[Anonymous No.18577711]

>>18577493
Figured as much, but the retards reacting in mass here is hilarious nonetheless.

[Anonymous No.18577733]

>>18577612
Not really, finance is not my thing, if I tried to predict something I would be guessing. I can explain it well after it happens, but to predict it is a whole other game.

[Anonymous No.18577854]

>>18577561
Mexico will become an even worse shithole thanks to this

[Anonymous No.18577914]

>>18577854
no it won't they want low oil prices retard.

[Anonymous No.18578290]

Crude oil prices mean nothing to the common man. You need to have the storage and transportation capacity to move thousands of barrels. The only way to make profit off the prices right now is to store and hold onto the stuff which requires a fuck load of government oversight because of safety reasons or have the means to refine crude oil into end products like petro fuels or lubricants.

There's other higher end components that can be made like certain plastics but oil is all over the place and it's too hard to pinpoint which market is going to take off when there's a surplus.

[Anonymous No.18578652]

>>18577914
that's not true you fucking idiot. Our whole economy depends on a stable oil price because our retarded state has put all his eggs on a single basket, cheaper oil means less money for Mexico since PEMEX is the prime income earner.

[Anonymous No.18578963]

>>18578652
The prime income earner in Mexico are drugs. Stop lying to yourself

[Anonymous No.18579042]

>>18577486
The pumps dont stop until the deposit is empty.

[Anonymous No.18579132]

>>18578963
The LEGAL prime income earner for the State is PEMEX, everything hangs on PEMEX working and selling oil at good prices (more so in our current administration who thinks we live in the 19th century) if oil goes down pretty much all infraestructure on Mexico goes down