The secret of “Tuesday, April 21” is the negative relationship of the US crude oil price


Futures contracts for US crude oil “West Texas Intermediate” during trading, today, Monday, to below zero, recording the lowest level in history.

The agency said, “Bloomberg,” that the futures contracts for “West Texas Intermediate”, by 21:55 Moscow time, at -37.63 dollars a barrel (negative level), a decrease of 305.97%.

Experts attributed the trading of US crude contracts for May delivery at negative levels, for several reasons, including technical, since the oil contracts that have fallen expire Tuesday (April 21, 2020) so whoever has the contract must receive the quantities of oil stipulated in it.

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With the storage of warehouses in the United States full, merchants began to get rid of these contracts, because whoever receives will not find the place to store the quantity, and if he finds the place, the cost of storage will be very high, meaning that whoever has the contract will be required to pay the costs of storage, transportation and other expenses.

And trading contracts negatively means that the seller is willing to pay the buyer for possession of the contract and it is less costly to the seller than the costs of owning and storing oil.


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