How did you end up with negative oil prices today?
>This happens when a physical futures contract find no buyers close to or at expiry.
Let me explain what that means:
>A physical contract such as the NYMEX WTI has a delivery point at Cushing, Oklahoma (a shithole in the middle of an empty shithole, but a cheap shithole nevertheless) & date, in this occurrence May.
>So people who hold the contract at the end of the trading window have to take physical delivery of the oil they bought on the futures market.
>This is very rare!!!!!!!
It means that in the last few days of the futures trading cycle, (which is tomorrow for this one) speculative or paper futures positions start rolling over to the next contract.
>This is normally a pretty undramatic affair.
What is happening today
>Trades or speculators who had bought the contract are finding themselves unable to resell it, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract.
>BUT BUT BUT all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires.
