04-20-2020, 01:39 PM
From the NYT:
"Oil prices tumbled on Monday as the economic crisis set off by the coronavirus pandemic continued to destroy demand for energy, and as concerns grew that storage tanks in the United States are near capacity and unable to hold all the unused crude.
It was a bizarre day for oil traders, owing largely to a quirk in the way that oil prices are set. Oil that is scheduled to be delivered next month fell 12 percent Monday to about $22 a barrel, but at the same time a key benchmark for oil to be delivered Tuesday was essentially deemed to be worthless by investors. It actually fell into negative territory, meaning people who had oil to sell were willing to pay people to take it off their hands."
Can anyone explain the "quirk in the way oil prices are set"?
"Oil prices tumbled on Monday as the economic crisis set off by the coronavirus pandemic continued to destroy demand for energy, and as concerns grew that storage tanks in the United States are near capacity and unable to hold all the unused crude.
It was a bizarre day for oil traders, owing largely to a quirk in the way that oil prices are set. Oil that is scheduled to be delivered next month fell 12 percent Monday to about $22 a barrel, but at the same time a key benchmark for oil to be delivered Tuesday was essentially deemed to be worthless by investors. It actually fell into negative territory, meaning people who had oil to sell were willing to pay people to take it off their hands."
Can anyone explain the "quirk in the way oil prices are set"?