{"id":4962,"date":"2020-04-30T19:18:30","date_gmt":"2020-04-30T23:18:30","guid":{"rendered":"https:\/\/ckms.ca\/?p=4962"},"modified":"2020-04-30T20:00:45","modified_gmt":"2020-05-01T00:00:45","slug":"where-do-oil-traders-dump-contracts","status":"publish","type":"post","link":"https:\/\/blog.ckms.ca\/?p=4962","title":{"rendered":"Where do oil traders &#8220;dump&#8221; contracts."},"content":{"rendered":"<p>From <a href=\"https:\/\/www.aljazeera.com\/ajimpact\/oil-prices-crash-affect-200421134650761.html\">this<\/a> article:<\/p>\n<blockquote><p>&#8220;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 <strong><em>traders were worried about where they could possibly store the crude<\/em><\/strong> they were obliged to take possession of, <strong><em>they dumped the contracts, sending them into negative territory.<\/em> <\/strong>&#8220;<\/p><\/blockquote>\n<p>I get that &#8220;traders&#8221; don&#8217;t want oil.\u00a0 They just want to sell the contract to someone else at a profit.\u00a0 They have to sell it or they&#8217;ll be taking delivery; as the day to take delivery nears, the price goes down, eventually even negative.\u00a0 So they &#8220;dump&#8221; the contract; the longer they wait (hoping for some miracle?) the worse it gets for them.<\/p>\n<p>So where do they &#8220;dump&#8221; the contracts?\u00a0 Must be someone with storage, since they&#8217;ll be taking delivery soon, up to the specific time the contract expires.<\/p>\n<p>But this means storage is not full.\u00a0 This should reduce the pressure to sell, which should keep the price up.<\/p>\n<p>Also:<\/p>\n<blockquote><p>&#8220;&#8230;Riyadh responded last month by lowering the price it charges for Saudi crude and pumping oil with abandon. That&#8217;s when prices really started to nosedive.&#8221;<\/p><\/blockquote>\n<p>I thought oil was priced by the highest bidder, not the seller?<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>From this article: &#8220;On Monday, the futures contract that obliged buyers to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[169,18,33],"class_list":["post-4962","post","type-post","status-publish","format-standard","hentry","tag-covid-19","tag-economics","tag-oil"],"_links":{"self":[{"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=\/wp\/v2\/posts\/4962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4962"}],"version-history":[{"count":0,"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=\/wp\/v2\/posts\/4962\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.ckms.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}