Why does Oil Price Go Negative in the Market? - Part 1

Monday, December 5, 2022

In case you did not know or forgot, just to remind that we experienced negative price of crude oil in the market in 2020.



Fig 01- Oil reached negative price (-US$ 37.63).
Credit to Google.


Surprisingly, crude oil price plummet sharply below zero or in the negative trading zone.


The price reached negative value (- US$ 37.63) for the first time at least in American history. The trading of future contract price was for West Texas Intermediate or WTI crude oil.


Negative price means that if we are consumers, then the producers will pay us to take their oil from their hands.



Fig 02- Hot chocolate, illustration



Fig 03- Late Autumn in our area.


We might ask the question, Why Oil Price Goes Negative? The multiple possible answers could be:

- oil supply more than market demand.

- oil stores are overflow or no spaces to store over supply of oil


In term of stock market, oil was traded in New York Mercantile Exchange (NYMEX) since 1983.


# To be continued to Part 2


## Previous postings:

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- Orange Speckle Canna is a Summer Flower | Tanza Erlambang Update

- Can Insulin be Produced from Laboratory Dish? - Diabetes 25 | Tanza Erlambang Update

18 comments:

  1. Ciekawy wpis odnośnie ropy. Miłego dnia

    ReplyDelete
  2. Gasoline prices are unbelievably high in Turkey, even the smallest situations in the world have begun to affect the us.

    ReplyDelete
  3. It's a pretty sad situation. I guess there are a lot of things causing this problem. I dunno if we are treating it right or not. But there is only so much you can do about it. And well, we can't just stay home..or some can't.

    ReplyDelete
  4. ...years ago Paul Harvey said, economics are easy to understand. "The price of wheat goes up the price of bread goes up, the price of wheat goes down the price of bread goes up!"

    ReplyDelete
  5. Hola! interesante el tema del petróleo. Que tengas un buen día. Besos

    ReplyDelete
  6. Replies
    1. Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 1
      -
      In case you did not know or forgot, just to remind that we experienced negative price of crude oil in the market in 2020.

      Delete
  7. So much volatility this whole year!

    ReplyDelete
  8. Petrol here keeps going up anyway regardless of crude oil price

    ReplyDelete
    Replies
    1. Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 1
      -
      In case you did not know or forgot, just to remind that we experienced negative price of crude oil in the market in 2020.

      Delete
  9. Petrol here is expensive and so is oil. There prices never go down very much to make a difference.

    ReplyDelete
    Replies
    1. I see....

      Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 1
      -
      In case you did not know or forgot, just to remind that we experienced negative price of crude oil in the market in 2020.

      Delete
  10. So interesting post
    Thanks for sharing
    Kisses ♥

    ReplyDelete
  11. Replies
    1. Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 1
      -
      In case you did not know or forgot, just to remind that we experienced negative price of crude oil in the market in 2020.

      Delete