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Oil price negative?


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Oil price negative?

  #11 (permalink)
 GFIs1 
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Thanks @SMCJB

"NYMEX Energy outright futures and options on CME Globex will be flagged as eligible to trade at negative prices. The options on futures will also be flagged as negative strike price eligible. Trading at negative prices for these outright markets will not be supported at this time. Negative strike prices will not be listed."

A week after the message you cited above CME made the update on their software over weekend to let negative pricing happen. For this - if it will be introduced - a official statement should be released. If it is not yet.

Interesting times though.
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  #12 (permalink)
 
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After this move.. maybe coming today...

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  #13 (permalink)
 GFIs1 
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From some sources it is to note that 40M barrels of oil on several ships are on its way to USA. It was loaded in March in Saudi Arabia and is ready to be unloaded in May at the east coast of USA.
This volume is the background for the fracking oil from Texas to be sold for *nearly nothing as all the tanks are already full and the process of getting out the oil there is technically said a very difficult thing.
It is not sure if a fracking field can easily being restarted after having stopped the process.
Therefore the prices are now in free fall to prevent the fracking guys of getting out the markets.
Economically this might be a good reason to sell the overload of pumped US oil with negative pricing.

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WSJ did an article on the Saudi VLCCs last week, I didn't link it here as it was behind the paywall. Goldman Sachs also did a big research piece a few weeks back. Their argument was related to what @GFIs1 is saying. That there could be so much logistical damage done that when things do turn around, how long will it take US Shale to recover. If Storage gets full, and pipelines backup, won't they have to shut wells?

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  #15 (permalink)
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A short overview on WTI crude - just intraday - 18 hours - an amazing slope



Not finished yet.

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  #16 (permalink)
 
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$6.67 now

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  #17 (permalink)
 GFIs1 
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SMCJB View Post
$6.67 now

great - thanks - was too slow to bring the chart to here in time

As you announced, price might touch the ZERO line today.

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  #18 (permalink)
 
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 SMCJB 
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Low of the day $4.04

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  #19 (permalink)
 
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GFIs1 View Post
For this - if it will be introduced - a official statement should be released. If it is not yet.

Just happened....

The following May 2020 Energy products (CLK0, HOK0, QHK0, QMK0, QUK0, RBK0, HCLK0, RTK0, WSK0, RLXK0, TCSK0, MPXK0, 23K0, CSXK0, 26K0) have no low limit and may trade negative.

If you have any questions, please contact the CME Global Command Center in the U.S. at +1 800 438 8616, in Europe at +44 20 7623 4747 or in Asia at +65 6532 5010.

The sender provided the following contact information.
Sender's Name: CME Global Command Center
Sender's Email: [email protected]
Sender's Contact Phone: 1 800 438 8616


The Q products are the mini's. WS is the financial bullet. HCL WTI @ Houston, not sure about the others of the top of my head.

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I didn't think anything was allowed to trade in -ve in markets, I'm never forgetting this day in my life.

This also speaks volumes about in markets anything is possible. It would be really interesting to see where this ship goes now

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Last Updated on January 23, 2021


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