General Question

RedDeerGuy1's avatar

(WCS) Western Canadian Select (Oil) was minus $34/per barrel last year. What else can go negative?

Asked by RedDeerGuy1 (18083points) 4 weeks ago

Like interest rates? What else could one make a profit from markets going negative?

Could I have bought all of it and sold it back a month later when It was positive?

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7 Answers

Zaku's avatar

You’re incorrect. It’s not negative. That would not make any sense.

https://oilprice.com/oil-price-charts/257

RedDeerGuy1's avatar

@Zak. On Global news Edmonton, Markets and More, they made the claim that Oil was negative $34 for a week last year.

Thanks.
I found a link I will show Fluther

Click on Year stats.

ragingloli's avatar

Interest rates on your bank account balance.

zenvelo's avatar

There is a reason oil went negative- too much was produced and nowhere to store it.

So yes, you could have bought 100,000 barrels, earned $3.4 million, and sold it for a $30 a barrel six weeks later and made another $3 million.

But it would have cost you more than $10 million to take delivery and store it for a month and then deliver it to the end buyer.

I don’t think your apartment in Red Deer is big enough to store 100,000 barrels of oil.

Zaku's avatar

Look at the graph you posted twice. Does the line near the bottom in places? Yes, but READ THE NUMBERS ON THE VALUE AXIS on the right side. What is the bottom value? It’s +$32.

A “negative closing” in the stock market occurs when a company’s stock ended the trading day at a lower price than it opened with that day.

As for the question, it is rare but technically possible for commodity prices to go negative. It means something like there is much more supply than demand, and there is a cost to store and deliver the commodity, so you’re expected to lose money if you buy the commodity because it’s expected that you’ll end up losing money by the time it sells because of the time to sell and the costs of storage and delivery.

See https://www.ig.com/en/news-and-trade-ideas/what-do-negative-oil-prices-mean--200507

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