Today was historic. The oil market offered a warning about just how significant the economic damage will be after the current crisis. We believe the petrodollar is now destroyed.
May West Texas Intermediate (WTI) just traded below zero for the first time ever (in fact, they traded below NEGATIVE $40 per barrel!).
There was a small bid right into the settlement at 2:30 ET leaving the May contract to settle at negative $37.63. How do you end up with negative oil prices, you ask?
Here’s how: when a physical futures contract finds no buyers close to or at expiry.
In this video, we discuss what the negative oil prices indicate and, with the help of some charts showing key points in the economic record of the oil market, we explain why today was historic (and not in a good way).