Headlines all over the world: “US oil prices just turned negative!”
So what’s going on here and what does it mean for you? let me try and balance us all so that we are all on the same page when we talk about it during the Lockdown.

1. Oil demand is really low... planes are on the ground, we are not driving as much, our mines are on lockdown, everything is PashAway. Supply is way up... Producers kept pumping oil, OPEC and Russia recently had a fight and opened to oil taps even more... flooding the market.

2. Now there is all this oil being produced but no one is drinking it up... solution = Storage! But most storage facilities are only designed to store normally 3 months worth. New Oil that is being pumped is coming but the old oil is not yet sold... "Oh no, what are we gonna do?"

3. Storage cost a lot of money, and there aren't a lot of places to store, so its better they just sell it off as cheaply as they can to make space for new Oil that is coming. And they did just that... sold oil as cheaply as they can...

4. first offering it for free and thn paying customers (not you at the pump... I'll come to you now - lol) more than $35 to take the oil away from them so that they could make space. The economics dictated that it would cost less for them to pay you to take it than to store it.

5. That is all happening in the USA Market. This is important because its a benchmark price. Other markets are also trading in low with Brent in its low $20s. This is bad for Oil producers because they are gonna close down.

6. Opec, USA, Russia and other producers decided to kiss and make up and turned off the Oil Taps a bit, but this has little effect coz the market is so flooded and we are not drinking the oil. Storage was the first cushion against an oversupply, but that is now limited.

7. We could ask countries like Angola and Nigeria to turn off their Oil Taps, but that means taking away their source of bread. More than 40% of these countries national budgets are "fueled" by Oil.

8. Bigger picture: Ths is a situation of a perfect storm. Low demand, High supply and expiring future contracts. So it's quite unique and not necessarily reflective of how things are. Things are bad (yes), but not that bad! I could go on and explain futures... I should actually!

9. Futures Contract: Oil is traded in Futures Contracts. A buyer pays now for oil to be delivered in the future. The contract they had expired yesterday so they had to get rid of the oil to make space for the new contract. This is basically the MAIN cause of negative prices.

10. For You: NO you will not be getting free petrol at the pump! Haha! Price of petrol at the pump has other costs included that you pay for. Some stations are keeping the price the same to offset low demand. GRN can use the excess money to cushion you from future volatilities.

11. For Environment: Oil products become cheap, "why would consumers buy new Teslas and businesses invest in renewable energy when oil is suddenly so much cheaper?" Shem!

12. For our economy: Oil prices indirectly affect costs such as transportation, manufacturing, and heating. The American economy will be hit hard, but we don't trade there... We should just learn from this and design our energy narrative to factor in these eventualities.

13. More on Us: The oil price collapse should help the Namibian economy as it will lower fuel costs and so lead to lower prices for those goods and services where transport is a significant factor.

14. Retweet, Tag and help me get a job! Lol! I did my community service!
- B.Juris; LLB (UNAM)
- MA/MSc. International Energy: Project Management & Emerging Economies (Sciences Po Paris)
Faces Master Exchange (Stanford University & Peking University)

Inbox if you want a bit more details. The lockdown has me missing these type of topics... or any topic. PS: Will be doing a webinar with the International Energy Agency soon! *sips water in unemployment*

cc: @NBCNamibia @hagegeingob @TomAlweendo @ydausab @KalondoMonica