From this article:
“On Monday, the futures contract that obliged buyers to take possession of US benchmark West Texas Intermediate (WTI) crude in May was set to expire the next day. And because traders were worried about where they could possibly store the crude they were obliged to take possession of, they dumped the contracts, sending them into negative territory. “
I get that “traders” don’t want oil. They just want to sell the contract to someone else at a profit. They have to sell it or they’ll be taking delivery; as the day to take delivery nears, the price goes down, eventually even negative. So they “dump” the contract; the longer they wait (hoping for some miracle?) the worse it gets for them.
So where do they “dump” the contracts? Must be someone with storage, since they’ll be taking delivery soon, up to the specific time the contract expires.
But this means storage is not full. This should reduce the pressure to sell, which should keep the price up.
Also:
“…Riyadh responded last month by lowering the price it charges for Saudi crude and pumping oil with abandon. That’s when prices really started to nosedive.”
I thought oil was priced by the highest bidder, not the seller?
