107
votes
Accepted
What does it mean for the price of oil to be negative?
These are futures contracts that expire on 4/21, which means that if you hold a futures contract at the end of the trading day tomorrow (April 21st), then you are obligated to "purchase" 1,...
- 140k
61
votes
What does it mean for the price of oil to be negative?
Russia and Saudi Arabia have been ignoring production limits set by OPEC. At the same time demand for oil has crashed due to the Covid-19 pandemic and associated lockdowns. The result is an enormous ...
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43
votes
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
Heating oil is at record high prices. It's not unreasonable to think that the price will go down at some point, especially if production increases due to high prices. However, generally the cheapest ...
- 140k
41
votes
What does it mean for the price of oil to be negative?
What should be taken into account that this isn't some random oil that one could take for a low price and store on a rented tanker or at some random storage. The particular contract that went negative ...
- 661
39
votes
Why would one choose to sell stock back to a company for less than their current market price?
One would sell the shares for the same reasons they are sold on the open market. Indeed, many share buybacks are performed on the open market, see how does a share buyback work
Additionally, companies ...
- 7,462
31
votes
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
What are some possible reasons that a heating oil rep would be
anticipating oil prices falling?
The script they are reading from tells them to say this. If they will make more money if the prices do ...
- 144k
22
votes
Why would one choose to sell stock back to a company for less than their current market price?
The price was around $60/share when the buyback was announced. My wild guess is that in response to selling off the Speedway brand, they were concerned about investors dumping stock, which could send ...
- 4,476
16
votes
What does it mean for the price of oil to be negative?
For the simple answer version to your question - yes, a negative commodity price means the seller is willing to pay someone else to take a contract off their hands. This is a feature of commodities ...
- 2,023
13
votes
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
It's a good idea to plan your heating budget in advance.
What would be even wiser would be to plan how you could reduce your oil consumption, or remove it altogether. Oil prices are expected to stay ...
- 471
7
votes
Accepted
Why did the price of crude oil drop below zero today?
Can I invest in crude contracts through a traditional brokerage firm? Will I get paid for every share I purchase?
That's not how futures work - you are entering into a contract to buy crude at a ...
- 140k
7
votes
Accepted
Why buy consumable commodities?
Why and how would anyone store them for an indefinite period of time?
You wouldn't (well, there are some market conditions where you might, but it's not the norm). Commodities themselves are not ...
- 140k
6
votes
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
Good plan to reduce risk usually is to diversify it.
Firstly (although not directly asked), you may want to reduce your dependence on oil for heating. So for example invest in better heating ...
- 279
3
votes
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
Oil prices are high mostly because of the Russian invasion of Ukraine, this has driven market fears of supply problems, and desire in the West to avoid buying Russian oil (pointlessly, because Russia ...
- 674
3
votes
Accepted
What is the real cost for storing a barrel of crude oil at present?
All storage at Cushing has been contracted for. The price drop isn't just reflective of the price of storage, but primarily of the scarcity of storage. Read the Storage & Transportation section of ...
- 2,023
2
votes
Accepted
Who creates oil futures?
The exchange "creates" the futures contracts. I use quotes because unlike stock in a company, you aren't really "buying" anything - you're entering into a contract with a ...
- 140k
2
votes
What exactly is the spot market?
The spot market is the market where you can buy goods for immediate or near-immediate delivery. For example, my last apartment was heated with heating oil, which we needed to purchase directly from ...
- 2,279
2
votes
the impact of drop in oil prices financial markets performance and prospects?
Irrelevant. See, the point is not that the oil price got cheaper. The point is that the most companies in the financial market face some brutal economic impact REGARDLESS OF THE OIL PRICE. Take an ...
- 11.6k
2
votes
Would using TD Ameritrade to manage Roth IRA contributions indirectly support new fossil fuel infrastructure?
I doubt there is a bank on earth which does not one way or another indirectly support new fossil fuel infrastructure.
Banks have employees. I'm assuming all of them use a computer, and work with ...
- 3,141
2
votes
Crude Oil Futures Settlement
CME WTI crude oil futures contracts, how does settlement work?
They are physically settled. CME does offer financially-settled oil contracts that are much more lightly traded, but the WTI contracts ...
- 140k
2
votes
Accepted
Historical Prices of Gasoline vs. Crude Oil in the United States
In the U.S., the Energy Information Administration (eia.gov) is your best bet for this kind of data.
For instance, here are weekly retail gasoline prices by state/selected metro areas going back to ...
- 374
1
vote
What are some possible reasons that a heating oil rep would be anticipating oil prices falling?
Large, liquid markets like oil are efficient and market participants make use of almost all available information when engaging in price discovery. Predicting what the price will be in the future is ...
- 368
1
vote
Why buy consumable commodities?
For speculation, which just means that someone is buying something solely for the purpose of selling it later, and zero intention of ever consuming that thing. There are certainly hybrid cases where a ...
- 2,365
1
vote
Can mere expectations affect oil spot price?
Yes commodities markets are affected by speculative information just like stock markets - everyone guesses at future earnings for companies, and the stock prices reflect that guess. They do not wait ...
- 140k
1
vote
Accepted
Would using TD Ameritrade to manage Roth IRA contributions indirectly support new fossil fuel infrastructure?
To answer your title question "Would using TD Ameritrade to manage Roth IRA contributions indirectly support new fossil fuel infrastructure?", the answer is simply "yes."
TD ...
- 132
1
vote
Negative Sell Trades — what do I need to do now?
Nothing. Hope that the price goes down. The money IS GONE. If the price goes up a little, then - well - you lost it all.
"I'm new to trading." - ah, "I am new to driving, I crashed my ...
- 11.6k
1
vote
Who creates oil futures?
Everytime you 'buy' a futures contract, somewhere someone else is 'selling' it, to you, at the agreed price. The exchange just facilitates this. When you 'sell' the contract, you sell it to someone ...
- 700
1
vote
Accepted
If I buy a crude oil futures contract at CME, must I sell the contract before the last trading day?
CME does offer financially-settled futures contracts for some commodities, which are settled based on the average price of the nearby physical futures contract. So if you don't want physical delivery ...
- 140k
1
vote
the impact of drop in oil prices on oil producing companies?
Oil-producing companies will see their revenues & profits drop or simply post losses. Most oil-producing companies (engaged in the production of crude oil only) will not be able to recover their ...
- 13
1
vote
Do governments publicly predict when global oil demand = oil supply?
Strictly speaking, oil demand = oil supply at all times, if you consider storage demand as part of the demand.
In the very long term, oil demand and oil supply will decrease, because of the arrival ...
- 6,753
1
vote
Why not invest in USO long-term?
So who ought to buy USO?
People who think the price of oil will go up in the near future (or think it will go down and can short USO).
How does USO profit ...?
USO is not a company - it is an ...
- 140k
Only top scored, non community-wiki answers of a minimum length are eligible