Some Actually Predicted That WTI Would Go Negative – We Did

4
1151

WTI – and some other US blends – has just gone negative in price. That is, people will pay you to come pick up the oil. Which is great if you’ve a spare oil tanker or two. Not so great if you’re an oil producer.

Well, sorta, it’s the oil futures contract expiring today which has gone negative, not the price of physical oil. But still. Wouldn’t it be great if someone had been able to predict this?

Ahem:

This is going to sound insane and it’s certainly unlikely – the oil price could go negative. And I do mean negative, less than zero.

Yep:

Where this prediction is going a bit wild is in saying that for some production we might in fact see delivery prices – that is, before transport – go negative. By negative I do not mean here that they fall. I mean producers, at the wellhead, paying people to take the oil away. This won’t translate through to gas station prices, but really could happen at select locations to the guys pumping it up out of the ground.

There were those who didn’t believe this could happen of course:

Worst all justified his name. Is worst of all I read abt oil, being in the biz for 30 yrs

Oh well……

4
Leave a Reply

avatar
4 Comment threads
0 Thread replies
11 Followers
 
Most reacted comment
Hottest comment thread
4 Comment authors
SnarkusJimNick LukeLeo Savantt Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Leo Savantt
Guest
Leo Savantt

“I ain’t often right, but I’ve never been wrong”

Nick Luke
Guest
Nick Luke

Peter Brailey predicted this on 21/03/2020 on Shareprophets…

Jim
Guest
Jim

You didn’t get it quite right though, its not the producers who are paying people to take oil away, its the middlemen who have bought the production futures who are paying people to take physical delivery of the oil they’ve contracted to take. A slightly different scenario than being able to rock up to an oil well and fill your oil tanker up and get paid for the privilege.

Snarkus
Guest
Snarkus

Must feel good to be proven right on unbeleivable events. Fuel here in regional Oz no longer requires firstbornn per tank fill but still way 50% above coastal areas. This in a town with 4 fuel sellers. Ain’t competition wonderful ? Except for price leadership of course