What does negative price for oil mean?

Petrol is toxic and explosive so it costs alot to store and ship it. You've got a barrel of petrol. Nobody wants to buy it from you because they've got contracts already for dirt cheap oil from bargains from the past few months. So you are going to have to store it until you have a buyer, which you wont have for maybe MONTHS now. By the time you do, you will have paid more for storage costs than the amount you will have made from that future sale. Net negative.

what I don't get is, you trade in futures, you have an idea of what's coming up in the next couple of months. Why can't you just stop production once you reaching this point? Or is it because of the worldwide lockdowns???

Ok jdif

Buy USO

You get paid to take it away but there are many other costs involved in doing so.

Yes

So basically if you stop an oil well it would need a lot of money to restart
So its cheaper for oil companies ti pay to take their oil for a short while

why not store it in your house? nobody has to know

They don’t put it in actual barrels for you you dumb nigger. It is a unit of measurement. Just like if you buy ag futures might be bushels, but it doesn’t come with bushel baskets faggot. Stop being a retard. You don’t have the resources to have a tanker unloaded into storage at a port. This could be a good chance though for small countrys to fill whatever tanks they have.

>Does the oil supplier pay me to take a barrel?
No, it means the guy who owns the future contract and is contractually obligated to take delivery will pay you (assuming you are registered at the exchange) to take the contract, so you can have the hassle of taking delivery and getting it legally stored or processed.

Or in other words it's not really relevant to you.

if you fill up your car with gas they give you money

Pic related is a good article about how it works.
It's old. If you don't want to give money to Mini Mike use the bypass paywalls app.

One of the current issues is investors blocking access to fuel storage to let stocks devaluate further, and another is contracts coming at their end forcing investors and speculators to sell (else they have to physically store the fuel themselves, which costs money).

So it reflects among other things that the price of storage is up.

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retard

>Why can't you just stop production once you reaching this point?

The whole process of extraction, shipping, refining, transportation takes months. So the finished product your getting right now is from extraction months ago. You can't really shut down the process inbetween because that would spoil the crude but also what you've got in the pipeline right now will, again, take months to reach market at which time potentially the market will be back to normal again. So there is risk either way but better to risk money and have the product than shut down and have nothing; potentially unable to restart if you fire those workers and you dont have the capital to recover.

>Why can't you just stop production once you reaching this point?
It takes a long time to stop production. It takes equally as long to start it up. Oil is the single most important resource for civilization. Everything, even food and water, depends on it. It's better to eat a small loss now and sell oil for negative, than risk the infrastructure being off when oil is needed again, because that will ACTUALLY cause shortages, and ACTUALLY cause death.

because crude is toxic and you're not gonna make more than 50 bucks in profit on it. and 42 gallons is not a small barrel

Guaranteed some Jew company will procure a ton then dump it in a lake or swamp.

>Why can't you just stop production once you reaching this point?
It's apparently really expensive to stop the oil flowing, once you've tapped it.

>I will illegally store large amounts of an extremely toxic and combustible substance in my own home. I am of genius!

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Why don't they just put it all back in the well, then?

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The producers have the buyers over a barrel. The buyers don't want the crude any more ... but they have a contract saying they will take it. So they have to pay the producers to not take oil.

For this month at least, producers are making out like bandits.

Oil wells aren't a two way street.

It means inflation will slow down and your paycheck can stretch longer

>buy trash
>don’t have anywhere to put trash
>have to take trash to the dump
>dump charges me to take trash

And (often) real expensive to restart it

The oil industry is not something you can just flip a switch and turn off at a moments notice. It is a very large and very slow moving monstrosity that takes weeks and sometimes months to get wells to produce. And once it stops moving it becomes more expensive to hold onto because you are paying people to maintain infrastructure without being able to flip it and turn a profit.

The question is how much cash do the big companies have to be able to operate at a loss and for how long.

You-know-who already filled the wells with dead hookers and abducted organ-harvesting victims.

The rest of the space is taken by artificial dinosaur fossils, that were brought there to prop up the evolution scam.