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Overnight WTI Oil (West Texas Intermediate) traded at a negative $40. Yip -$40, traders were paying you to take their oil off their hands.
Totally wild and now everybody wants to be an oil trader.
But some caution before you jump in.
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Totally wild and now everybody wants to be an oil trader.
But some caution before you jump in.
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WTI is the North American oil benchmark, for the rest of the world it is really Brent and that price did not collapse nor go negative trading around $25 ..
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More importantly is that this was the May delivery contract for WTI that expires today. The problem is a lack of demand that has resulted in full storage. Nobody wants delivery in May as they have nowhere to store it and no demand, would have to throw it away.
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Hence the negative price.
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The later delivery contracts for WTI are now trading at around $21.
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The #JSE has two options for trading oil.
SBAOIL is an ETN from Standard Bank that tracks the WTI price in ZAR. It closed yesterday at R631, using R19/US$ that implies a price of some $33 for WTI. The higher price is likely because they use blended delivery dates.
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SBAOIL is an ETN from Standard Bank that tracks the WTI price in ZAR. It closed yesterday at R631, using R19/US$ that implies a price of some $33 for WTI. The higher price is likely because they use blended delivery dates.
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There is also an oil futures contract tracking Brent that closed at R609 implying a price for Brent of some $32.
So neither of these products crashed and if you're buying them you are not buying oil at zero or negative.
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So neither of these products crashed and if you're buying them you are not buying oil at zero or negative.
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I'll make that point again because it is important.
Buying oil today is NOT buying negative or zero priced oil.
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Buying oil today is NOT buying negative or zero priced oil.
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Lastly our petrol price? We do not use WTI, rather we use a blended price from supplies in "Mediterranean area, Arab Gulf, and Singapore.". Those prices are lower, but not zero nor negative.
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