Economics and policy issues UD Newswatch highlights

Current oil and commodity prices — U/D, WTI May future, hits MINUS $37 per bbl!

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As my personal blog tracker reports:

Let me add, a 1-year look:

This of course reflects the impact of economic slowdown due to lockdown, but it also implies room for considerable stimulus. END

PS: A look at going into depression:

A strongly shocked economy can tumble well within the PPF, sticking there for years, as in the 1930’s. A long enough pandemic lockdown could send it there. However, I doubt it, though a recession is likely.

9 Replies to “Current oil and commodity prices — U/D, WTI May future, hits MINUS $37 per bbl!

  1. 1
    kairosfocus says:

    Current oil and commodity prices — oil at US$ 28.08 for Brent, WTI at $ 18.27. As the world is on the oil standard, that’s significant.

  2. 2
    daveS says:

    KF,

    Have you checked the price on Western Canadian Select lately?

    Edit: Supposedly the price had gone negative for a while.

  3. 3
    vividbleau says:

    WTI crude is down 90% for year, the May contract is down 36% today!

    Vivid

  4. 4
    kairosfocus says:

    DS, I don’t monitor it but it’s a heavy crude. If it really went much below US$ 4.80 I’d like to see. KF

  5. 5
    Barry Arrington says:

    Spot on WTI just hit $0.33. Yes, 33 cents.

    That is, of course, far below the cost of production and represents a negative gross profit for the producers. As said, they are effectively paying buyers to take it off their hands.

  6. 6
    kairosfocus says:

    Oh, real fun,

    https://www.cnbc.com/2020/04/20/stock-market-today-live.html

    >>. . . 3:03 pm: US oil contract expiring Tuesday settles in negative territory

    West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands. —Stevens
    3:00 pm: Final hour of trading: Dow falls more than 500 points after historic oil plunge

    With roughly one hour left in the trading session, the major averages fell on the back of a historic decline. The Dow traded down more than 500 points, or 2.2%, while the S&P 500 slid 1.6%. The Nasdaq Composite traded more than 0.5% lower. West Texas Intermediate futures for May, which expire Tuesday, traded below zero for the first time ever as the deterioration demand outlook pressured prices across the futures curve. —Imbert>>

    –> Storage is threatening to run out.

    KF

  7. 7
    kairosfocus says:

    Folks, this would normally reflect a depression, but I rather doubt it unless there is a HUGE wave of bankruptcies, not just Niemann Marcus etc. KF

  8. 8
    kairosfocus says:

    U/D: WTI May future hits MINUS $37, and I add a PPF macro framework to aid discussion.

  9. 9
    vividbleau says:

    Heck we have negative interest rates worldwide why not negative crude LOL

    Vivid

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