The Koch brothers are buying oil for -$0.50 per barrel

Discussion in 'Commodity Futures' started by Banjo, Jan 20, 2016.

  1. 007trader

    007trader

    Look up: Hi-Crush Partners. They are one of the two or three largest frac sand suppliers in the US. They only sell take or pay. So if you shut off the wells and you don't have anywhere to store the sand (I honestly don't even know if you can do this) then you pay them to keep their sand. If selling the oil at -.$50 costs you less than turning the sand away, you pump the oil and sell it. (Theoretically, as nobody ever seems to have hit the negative bid)
     
    #21     Mar 15, 2016
  2. Sig

    Sig

    Got it, thanks for the example. I was thinking the driller as supplier, not the taker.
     
    #22     Mar 15, 2016