How did crude futures drop into negative territory yesterday, trading at one point at minus $14.04 per barrel? Basically because nobody's buying it right now. The only buyers of oil futures are entities that want to physically take delivery of it, like a refinery or an airline. But demand has dropped and storage tanks are filled, so they don’t need it.
One thing that tripped the switch was a report from the International Energy Agency, which warned that demand in April could be 29 million barrels per day lower than a year ago, hitting a level last seen in 1995. And with places to store the crude quickly filling, some experts feel that prices could stay low for a lot longer.
But it looks like the negative price was a one-day anomaly. West Texas Intermediate crude futures for May delivery turned positive in overnight trading, with the May contract trading at $1.17 per barrel by the evening.
No comments:
Post a Comment