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There are 2 indices that are used as benchmarks to price oil worldwide - WTI and Brent.
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Ok but why do they trade at different prices? Firstly because quality of oil is different. WTI is 'lighter' & 'sweeter' than Brent oil. 'Lighter' is preferred to 'heavier' because it more expensive to refine.
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So ideally, WTI should trade at a slightly higher price than Brent. It used to actually, until Brent became costlier around 2011 or so
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So coming back to why WTI went below $0.
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Now, why will I sell? Can't I just wait till prices rises and then sell?
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Wait, what's all this? Time for us to understand how oil futures work.
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Why would someone do that? To bring in some certainty around how much they will have to spend on oil.
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But then there are few people who don't need oil. They just want to make a bet on the oil price and make some money off that ("Speculative traders")
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If current price is $35, he/she will pocket profit of $5. If price is $25, the'll pocket a loss of $5
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So a smarty trader (let's call him 'Bala') bought WTI oil futures in Dec 2019 with a promise to buy oil at say, $30 in Apr 2020. D-day arrived and price of oil was way below $30 because of lower demand due to Covid-19
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But Bala had to sell. He was willing to give the oil away for free ($0) but still no one bought.
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Bala also saved himself by limiting his loss to $70 ($30 + $40). He'd have been worse off had he held on
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Brent hasn't touch zero or sub-zero levels because there are few people with empty storage in Europe, middle east, etc who are still buying. Once they start touching 100% capacity, we can possible see even Brent touch $0 or below
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Just FYI, India buys oil from OPEC (a group of oil producing nations) which price their oil based on Brent
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Fin.