For a While This Week, Oil Was Cheaper Than Dirt. Should We Be Worried?
Wars have been fought over oil, but for a few hours Monday afternoon, West Texas Intermediate crude was one of the most unwanted commodities on earth. Prices for May delivery of a barrel of “Texas Tea” went negative—to minus $38. In other words, oil cost less than dirt, less than a ray of sunshine, less than a puff of wind. If you wanted to sell your oil for delivery next month at the hub in Cushing, Oklahoma—a key pipeline intersection where prices are set for U.S. crude—you would have had to pay someone nearly $40 a barrel to haul it off. Most investors who trade oil futures don’t actually want to own oil in any physical form. They sell the contracts before they come due.…View Original Post
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Source: Texas Monthly