You may read previous post (Part 1):
- Why does Oil Price Go Negative in the Market? - Part 1 | Tanza Erlambang Update
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.
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.
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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