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