Negative oil prices coming?
Oil "[d]emand is falling so fast relative to supply that very soon many producers' main issue is ... if they can find an outlet for their crude"
One storage option: loading the extra crude onto ships.
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HT @AukeHoekstra edition.cnn.com/2020/04/01/bus…
Oil "[d]emand is falling so fast relative to supply that very soon many producers' main issue is ... if they can find an outlet for their crude"
One storage option: loading the extra crude onto ships.
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HT @AukeHoekstra edition.cnn.com/2020/04/01/bus…
BC said about 20% of the global fleet of very large crude carriers (VLCCs) could become floating storage. But even that would not absorb the surplus.
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This oil glut is creating a scenario where some obscure grades of oil already have actually dropped below zero. For instance, a Wyoming crude grade was recently bid at negative 19 cents a barrel.
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"The price is trying to go to a level to force companies to keep the oil in the ground. If it has to go negative to incentivize that behavior, then it will," said Neuberger's Wyll.
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Today's oil glut may suddenly turn into tomorrow's oil scarcity, pushing prices "far above" $55 next year.
"This will ultimately create an inflationary oil supply shock of historic proportions"
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"This will ultimately create an inflationary oil supply shock of historic proportions"
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