US Oil Prices Crash Below $0 a Barrel

[DoggieDaddy]

Sorry I don't think filling our caverns while people are dying seems right. We need to spend the money on saving folks, we can always pump more oil.

I apologize for being political but I needed to counter the notion that there was a lack of reasoning for opposing buying up oil at this time.

[wajell]

The average commodity trader would not be allowed to hold a position into a contract delivery month. Margins go through the roof and if you can't meet the margin call your position will be liquidated by the firm. The exchange has minimums but the firm can make the margin amount anything they want.

I suspect looking at the action, that some hedge fund got locked into a stupid position (long) by PURE STUPIDITY and lost a ton of money. They HAD to sell and the shorts just sat on their hands and let the panicked longs offered it down to below zero just to get out. It should be interesting if any funds close and are liquidated in the coming weeks. The exchange knows what happen, but they will never tell.

Delivery of the commodity against a futures contract is a possibility, but rarely happens. Some are more likely than others. Precious metals are fairly easy.

Some are a lot harder. I once delivered a contract of cattle for a customer (rancher) who was short. 3 of the little critters died the day before they were scheduled for delivery and he had to go into the cash market to replace them. Very costly for him. He never tried that trick again.

[Ann n Gene]

This is futures contact trading and the month trading closed today. All oil for delivery on the commodity market is to be delivered to Cushing, OK and those multi million barrel storage tanks are almost completely full for the first time. People are actually renting supertankers to store oil. Thus future traders were paying someone to take delivery of their contract by selling at a loss because they could not get storage in Cushing.