Quick Point you all should note is that the Crude oil that has crashed into negative price is the WTI Crude (West Texas Intermediate) this is primarily used in the US and it’s light (makes low sulphur gasoline) the rest of us we are on Brent crude, Still at +$26 a barrel.

WTI Crude (the one that’s crashed) is light i.e API Gravity and sweet I.e low sulphur and is used to make low sulphur gasoline and diesel. The international market we have always used heavier one i.e Brent - the prices have gone down but still it’s +$26

WTI has crashed into negative prices, what does that mean? Crude is very volatile and since oil is sold on futures (will explain what that futures mean) it means sellers will have to pay buyers to take oil from their hands.

Why would anyone pay you to take crude oil from them? Well simple explanation- with COVID now a reality the world is no longer consuming oil as it was produced therefore the producers have ran out of storage!

With grounding of flights, people staying indoors and basically a cessation around the world infrastructure development such as pipeline capacity has been unable to catch-up with the surge in output. Therefore we find ourselves here!

Now to more complex matter: Contract futures- crude oil market is very volatile and prices can fluctuate on RUMORS. In such trades what are used are contract futures this is whereby buyer and seller agree to transact in a certain date and a certain price - binding!

Then one would ask why is the WTI Market collapsing today - simple answer, the futures already committed were lapsing today therefore the sharks are getting into new contract futures tomorrow!

Could there be underhand dealings? Absolutely! Traders who had leased storage would want to snap up cheap oil before locking in much higher prices in the futures market, example buy oil for $1 per Barrel and sell a month later for more than $20. (Volatile prices)

What do I think should happen next? I don’t see the prices bouncing due to cessation we are in around the world and since storage and infrastructure around the world are getting filled up the producers will have to shut down production temporarily (consequential)

Do I expect the WTI or Brent Prices to go even lower? Yes I do - this is partly because the producers are still producing and we are not consuming as we were and also a SHITLOAD of vessels are at the sea transporting crude that nobody needs

That’s it for now, if you have a question and I feel like answering you can ask. PS: I am not an authority on this but I am equipped than most people on the subject. There may be an error or two. Cheers.