Monday, April 20, 2020

Why Oil Price Goes Negative in the Market?

Oil reached negative price (-US$ 37.63).
Credit to Google.

Surprisingly, oil price plummet sharply below zero or negative. The price reached negative (- US$ 37.63) for first time at least in American history.

Negative price means that if we are consumers, then the producers will pay us to take their oil from their hands.

We might ask the question, Why Oil Price Goes Negative? The possible answers are:
- supply more than demand
- oil storage are overflow
- no space to store over supply of oil

In term of stock market, oil was traded in New York Mercantile Exchange (NYMEX) since 1983. NYMEX was opened in 1872 for commodities trade, included:
- copper
- platinum
- gold
- silver

The negative price happened when sellers can not find the buyers for future contract, usually near term contract.

Near term contract refer to price contract in days, weeks or a month, not in years.

It is a sign of bad economy in which negative price means no demands, thus less industry activities (productions). Then, lead to unemployment, and then hurt economic. On and on. 

30 comments:

  1. During this Movement Control Order, we hardly use our car and the petrol tank is still full. We have to braced ourselves for a world wide bad economy.

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Surprisingly, oil price plummet sharply below zero or negative. The price reached negative (- US$ 37.63) for first time at least in American history.

      Delete
  2. This is very interesting and enlightens me how the news here tells us of price rollbacks. Although we don;t get to enjoy this news lately due to the lockdown.

    Thank you so much for following my blog and I am now a follower of yours as well :) I really love your name, it's very interesting because one of the cities here in Cavite Province where I live is named "Tanza" :)

    ReplyDelete
    Replies
    1. Wow...surprising me about my name...

      Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Negative price means that if we are consumers, then the producers will pay us to take their oil from their hands.

      Delete
  3. We don't need a lot of oil today because a lot of our cars are in the garages and the planes are at the airport and not in the air.

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      We might ask the question, Why Oil Price Goes Negative? The possible answers are:
      - supply more than demand
      - oil storage are overflow
      - no space to store over supply of oil

      Delete
  4. Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      In term of stock market, oil was traded in New York Mercantile Exchange (NYMEX) since 1983. NYMEX was opened in 1872 for commodities trade, included:
      - copper
      - platinum
      - gold
      - silver

      Delete
  5. I don't have a car but I do heat my apartment with oil. It's a good time to buy some if you need it but overall it's bad for the economy worldwide.

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      The negative price happened when sellers can not find the buyers for future contract, usually near term contract.

      Delete
  6. ne sto sentendo parlare in questi giorni del forte calo,quasi non vorrebbero estrarlo..
    un caro saluto

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Near term contract refer to price contract in days, weeks or a month, not in years.

      Delete
  7. We are together in this lockdown... so we don't need a lot of oil, too bad for the economy, I know...
    Stay safe, please!
    Kisses, Paola.

    Expressyourself

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -

      Delete
  8. I Agree With Your Stats - Its Just That I Am Pleased About Fewer And Fewer Cars On The Road - Made For A Very Special Earth Day - Stay Strong Brother T

    Cheers

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      It is a sign of bad economy in which negative price means no demands, thus less industry activities (productions). Then, lead to unemployment, and then hurt economic. On and on.

      Delete
  9. I'm glad there's fewer cars on the road too. Covid-19 is getting all the news these days but we still need to do something about carbon emissions and climate change. I'm pretty sure all of this will be terrible for the economy though.

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Oil reached negative price (-US$ 37.63).
      Credit to Google.

      Delete
  10. Es ist gut, dass die Natur auf Grund der Krise einmal ein wenig Pause hat. Vielleicht musste das alles so sein, damit wir endlich kapieren, dass es so nicht weiter geht!
    Liebe Grüße
    Christine

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Surprisingly, oil price plummet sharply below zero or negative. The price reached negative (- US$ 37.63) for first time at least in American history.

      Delete
  11. We are living in the times of history at the moment.
    All the best and stay safe!

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Negative price means that if we are consumers, then the producers will pay us to take their oil from their hands.

      Delete
  12. Definitely less demand for oil right now with many people staying home and working from home. Stay safe!
    ~Jess

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      We might ask the question, Why Oil Price Goes Negative? The possible answers are:
      - supply more than demand
      - oil storage are overflow
      - no space to store over supply of oil

      Delete
  13. Everyone is staying home so less usage too.

    ReplyDelete
    Replies
    1. Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      In term of stock market, oil was traded in New York Mercantile Exchange (NYMEX) since 1983. NYMEX was opened in 1872 for commodities trade, included:
      - copper
      - platinum
      - gold
      - silver

      Delete
  14. The low gas prices are unbelievable. I haven't driven my car in a month (although the husband has a few times). #goal for tomorrow: start that thing up!

    Also, I'm very happy to hear that your neighbor gave you a mask. The acts of kindness alive in this trying time show the beauty of the human spirit.

    ReplyDelete
    Replies
    1. Unfortunate, we less drive when gas price goes lower.

      Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      The negative price happened when sellers can not find the buyers for future contract, usually near term contract.

      Delete
  15. The world's economic is going to get really low for some time and many industries has been heavily impacted. Not only oil and gases but also services such as renovation services, entertainment and much more! Lets say strong and get through this together!

    ReplyDelete
    Replies
    1. Yes, indeed....

      Thank you to visit:
      Why Oil Price Goes Negative in the Market?
      -
      Near term contract refer to price contract in days, weeks or a month, not in years.

      Delete

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