The price of crude oil futures turned negative. After waking up one night, many students were shocked by the price of crude oil futures in New York, because there was a negative price that had never appeared in history, and the negative number was not an ordinary decimal, but a w

is really a long time coming.

Crude oil futures price suddenly turned negative

After waking up one night, many students were shocked by the crude oil futures price in New York, because there was a negative price that had never appeared in history, and the negative number was not an ordinary decimal, but a negative number. It cost a full $40.

This price is 60 US dollars/barrel different from the price of the June crude oil futures contract. The price of the June crude oil futures contract is a relatively real transaction price, which is around 20 US dollars/barrel.

However, the May contract of crude oil futures was unable to be delivered by the bulls, which led to the occurrence of many kills. Moreover, the May contract of crude oil futures expired on Tuesday, so under such circumstances, an extreme result occurred. The final transaction price not only fell. It exceeded US$1 per barrel, and there was a price reversal, with the price per barrel falling to a negative US$40. The price of

is obviously not the real crude oil futures price, or the price corresponding to the spot price of crude oil. This is a tragedy caused by the inability to deliver.

I estimate that many people will lose their money because of this, and judging from the current results, even if they lose their money, they will still be in debt, because the inability to deliver the goods leads to such a debt transaction.

Why did crude oil futures prices plummet?

I think this is caused by a flaw in the design of New York crude oil futures, which leads to excessive speculation and creates a huge gap with the actual crude oil spot delivery.

We know that the price of crude oil has been falling since this year. Some time ago, it was around US$20/barrel. OPEC and other OPEC countries have also communicated with each other about production restrictions and reached a certain agreement, which means that the supply side has reached a certain agreement. , they decided to reduce production by 9.6 million barrels per day, so as to control prices.

But who has the final say in the relationship between supply and demand? In a situation of oversupply, the demand side has the final say. Now that the global economy is in "shock", the demand for crude oil has disappeared overnight.

mentioned previously that countries are scrambling for oil. Oil storage facilities in various countries are now basically facing a situation where the tanks are full. In other words, there is no place to store the produced crude oil, which is the most important reason why the price of crude oil will fall to -40 US dollars per barrel.

Because even if it is delivered, there is actually no place to store it. Oil and water It's different. You can't pour it into the water or the sea. It will cause pollution. This is the cost of development. After driving it, you still have to find a place to store it and store it.

Either heaven or hell

If this situation cannot be restricted and improved, then the crude oil futures price of the June contract currently being traded will probably be in the same situation when the delivery date comes, and we will also face helplessness. With such a delivery pattern, I am afraid there will also be negative numbers by then. The market of

is really scary to watch. This is a characteristic of futures. Unlimited leverage magnifies the risk. In the end, either the longs or the shorts will be killed.

There is a sentence that impressed me deeply, that is, "If you like a person, let him do futures, because that is heaven; if you hate a person, let him do futures, because that is hell."

Author: Shuipi Zatan Studio

Editor: Li Yong