Why is cheap oil prices negative to the economy

Discussion in 'Economics' started by Amatrue, Apr 20, 2020.

  1. ironchef

    ironchef

    In any case, Trump said during yesterday's White House press conference that he was either going to buy those oil or rent the Strategic Oil Reserve storage out and there are 76 million barrels of storage space available (that means USG has been loading up on cheap oil since March 6). The US Government could make some money on this and help US oil producers.
     
    #21     Apr 22, 2020
    piezoe likes this.
  2. Bobbybax

    Bobbybax

    76 Million barrels will fill up in 3 days.
     
    #22     Apr 22, 2020
    Atikon likes this.
  3. traderob

    traderob

    Interactive Brokers Issues Statement on Crude Oil Contracts and Margin Loss
    April 21, 2020 04:01 PM Eastern Daylight Time


    GREENWICH, Conn.--(BUSINESS WIRE)--Interactive Brokers Group, Inc. (Nasdaq: IBKR) today noted that, as has been widely reported, the energy markets yesterday exhibited extraordinary price activity in the New York Mercantile Exchange (NYMEX) West Texas Intermediate Crude Oil contract. The price of the May 2020 contract dropped to an unprecedented negative price of $37.63. This price was the basis for determining the settlement price for cash-settled contracts traded on the CME Globex and also on a separate, expiring cash-settled futures contract listed on the Intercontinental Exchange Europe (“ICE Europe”).

    Several Interactive Brokers LLC (“IBLLC”) customers held long positions in these CME and ICE Europe contracts, and as a result they incurred losses in excess of the equity in their accounts. IBLLC has fulfilled the firm’s required variation margin settlements with the respective clearinghouses on behalf of its customers. As a result, the Company has recognized an aggregate provisionary loss of approximately $88 million.

    The Company does not believe that any anticipated losses will have a material effect on its financial condition.
     
    #23     Apr 22, 2020
  4. ironchef

    ironchef

    That is OK as long as US G makes some money for a change.
     
    #24     Apr 22, 2020
  5. SunTrader

    SunTrader

    Think fine print said to "mail check" to T.O. 725 Fifth Ave, NY, NY Attn: Junior ;)
     
    Last edited: Apr 22, 2020
    #25     Apr 22, 2020
  6. piezoe

    piezoe

    Nevertheless we should fill it up. Are there any other salt domes around we could fill?
     
    #26     Apr 22, 2020
    ElCubano and ironchef like this.
  7. piezoe

    piezoe

    If there are proven salt domes around that we could quickly convert to oil storage we should do it and fill them up. Times like these are made for great leadership to step forth and shine. Sadly, the U.S. leadership in place is the worst imaginable.
     
    #27     Apr 22, 2020
  8. ironchef

    ironchef

    Good thinking. There are a few around. Send Trump a Tweet.
     
    #28     Apr 22, 2020
  9. SunTrader

    SunTrader

    More like get yourself booked on Fox and Friends or some other "newsworthy" show lol to get his attention and hope he took his adderal that day.
     
    #29     Apr 23, 2020