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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" 1,000 barrels (per contract) of oil for -$13 (effectively you get paid $13/barrel to take the oil). But that also means that you will need the means to transport ...


60

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 glut of crude oil. Some nations like the US have been filling their strategic reserves, but those are nearing capacity, and storage is getting tight. The ...


40

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 was for delivery in Oklahoma through a pipe. The existing storages there are nearly full. Unless you have the means to build a storage facility you are ...


39

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 may directly buy back large positions from major investors. If you have a major position, it can be difficult to sell it without affecting the price. In this ...


22

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 the price much lower. By offering a minimum price, they can absorb the more "panicky" sellers and keep the price above $56. At the same time, if the ...


16

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 where storage, transportation, maintaining production, refining or carrying cost are a part of the equation. In the specific case in question, the interaction of ...


10

There are many ways of investing either directly or indirectly in oil: There are commodities brokers that will sell you oil by the barrel and store it for you but the minimum lot size is likely to be large and storage costs may destroy any gains that you make. In the short run you can trade in oil CFDs (contracts for difference) but these are more ...


7

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 traded on exchanges - what is traded are derivatives such as futures and options. And the physical delivery depends on the type of derivative that you trade. There ...


7

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 certain price. When that price is negative, it means that you get paid to take crude when the contract expires. The problem is that you have to store it somewhere, ...


5

Unless you have the storage and transportation facilities for it, or can come up with the money needed to rent or build those, no -- or not in any significant quantity. Buying oil futures is essentially an on-paper version of the same bet. Futures prices are already taking into account both expectations about price changes and the fact that there's cash ...


3

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 this answer for a longer explanation. There is no sticker price for storage at Cushing. There might have been in a different environment when it only served a ...


3

You can buy the exchange traded fund ETF WTI Crude Oil (CRUD), amongst other ETF products. http://funds.ft.com/uk/Tearsheet/Summary?s=CRUD:LSE:USD Note these funds do not 'jump' when the crude oil futures contracts are in contango (e.g. June contract is priced higher than May) and the futures roll-over, as they do monthly. When this happens the ETF ...


3

USO is the United States Oil Fund. There isn't a single crude oil price as there is for gold. There are many grades of oil traded, e.g. West Texas Intermediate, Brent. From the USO Fund Detail page, you can determine which crude oil contract USO is based on. It is WTI light, sweet crude oil delivered to Cushing, Oklahoma. You can also see that there is no ...


2

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 that went negative are physically-settled by definition. If I don't want to take physical delivery, how do I indicate that? It's built into the contract - ...


2

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 counterparty (also arranged by the exchange). The exchange sets up the contracts and the platform to facilitate the legal documents (and settlement, margin, etc.) ...


2

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 the supplier. Looking at their website, if I wanted to purchase heating oil right now it would be 0.7299CAD/litre and it would be delivered early next week. This ...


2

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 artificial light at least sometimes. These require electricity to run. Much of that electricity is generated by fossil fuels. The employees also probably sit in ...


1

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 user accumulates and stores the resources and may either use them or sell them later. Speculation serves two purposes: Allow the speculator to gamble, and ...


1

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 for the actual earnings to be reported. But, in commodities markets futures prices are more affected by speculative information than spot prices, since spot ...


1

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 Ameritrade facilitates the buying and selling of stocks. Those stocks directly contribute capital to their respective companies. Many of the stocks on the market ...


1

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 then you can buy these contracts, but they are much less liquid (you may have a larger bid/ask spread to overcome). I'm assuming your question is motivated by ...


1

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 capital and/or operating costs. This means that some of them will also go bankrupt as they exhaust their credit facilities. Some integrated oil companies can ...


1

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 of electric vehicles and hydrogen for long distance trucks. If investing in energy companies, you should be investing in companies where the reserve depletion ...


1

Ignoring complexity around futures and delivery, think about it like your garbage: you have to pay someone to take it away because no one wants it. Or another, way, if you trade the futures right some producers are being paid to not produce oil. Something similar happened in the electricity market in Europe in 2017; power prices went negative in Germany ...


1

The reason the oil price is low today is because demand is low, production cannot be reduced easily, and people have no space to store oil. So you won’t be able to buy oil today cheap and sell it in a year for lots of money unless you have the ability to store it. Nobody will be willing to sell you oil cheaply without you physically taking it away.


1

That graph above is misleading and incorrect. I do not know how it was created, but USO suffers from contango and backwardation. It does NOT follow WTI that closely. WTI is usually in contango and USO loses value near the first of a month when USO rolls the futures contract to the next month. Usually done the 6 - 10 th approx. This article explains and ...


1

Yes, there is a direct linear relationship between USO and crude oil (CL futures). CL futures are for West Texas Intermediate crude oil. USO tracks West Texas Intermediate (WTI) crude oil: The United States Oil Fund® LP (USO) is an exchange-traded security designed to track the daily price movements of West Texas Intermediate ("WTI") light, sweet crude ...


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