Why does Oil Price Go Negative in the Market? - Part 2

Friday, December 30, 2022

You may read previous post (Part 1):

- Why does Oil Price Go Negative in the Market? - Part 1 | Tanza Erlambang Update



Fig 01- One of gasoline stations at neighborhood


However, NYMEX was opened in 1872 for commodities trade only, the stocks included:

- copper

- platinum

- gold

- silver


The negative price happened when sellers can not find the buyers for future contract, usually near term contract.



Fig 02- Early morning, illustration only


The oil future price should be higher than today price (the spot price). In fact, the price is often higher in the short and long terms.



Fig 03- A Pom Pom flower, illustration


Near term contract refer to price contract in days, weeks or a month, not in years (long term).


It is a sign of bad economy in which negative price “could be” meaning there is no demands, thus less industry activities (productions).


Then, lead to unemployment, and then hurt economic. On and on.


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10 comments:

  1. It has awful consequences... Pretty flower photo!

    ReplyDelete
  2. Replies
    1. Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 2
      -
      You may read previous post (Part 1):
      - WHY DOES OIL PRICE GO NEGATIVE IN THE MARKET? - PART 1 | TANZA ERLAMBANG UPDATE

      Delete
  3. Always coming down to supply and demand

    ReplyDelete
  4. Interesting informations, thanks for your sharing...

    ReplyDelete
  5. Well, unfortunately, these are the laws of the market - in any case...
    Regards

    ReplyDelete
  6. In questo nuovo anno vorrei che tu avessi uno splendido gennaio, un dolce mese di febbraio, un marzo felice, un aprile senza stress, un maggio all'insegna del divertimento, gioia e spensieratezza da giugno a novembre, ed infine un indimenticabile Dicembre colmo di felicità e amore. Possano i miei desideri diventare realtà. Buon 2023.

    ReplyDelete
    Replies
    1. Thanks to visit my blog-
      Why does Oil Price Go Negative in the Market? - Part 2
      -
      You may read previous post (Part 1):
      - WHY DOES OIL PRICE GO NEGATIVE IN THE MARKET? - PART 1 | TANZA ERLAMBANG UPDATE

      Delete