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How can oil barrel prices be negative?

It’s like being paid for buying oil. In this infographic, it’s saying I could buy all these things by buying a barrel of oil. 


Casablanca
1.2k views

7 comments

We can buy all that only if we get paid for buying oil. But, we wouldn't get paid.

The negative price for oil would be for oil storing and using companies and not retail consumers. The retail people get oil through channels of storage companies only, but, since they already purchased it for a price and are full, they would like to offset that price from us before buying anymore. If they are able to use reservoirs/inventories before oil prices increase, they and hence govt. might see a slight drop-down in prices and its upto govt. to pass it on to us or not. (Slight as using oil would derive oil demand up and hence prices automatically)

Naadan_Parinda, Tetsuko and 1 others like this
688 views

Because there is not enough storage for the crude...if OMCs are not taking from E&P companies...where to store extra oil so -ve   

Tetsuko, Casablanca
648 views

Negative pricing can occur when demand for a commodity drops to an extent that suppliers are prepared to pay others to take it away, in effect setting the price to a negative number. 

Essentially, Negative prices are a signal to either increase demand or reduce supply. 

Naadan_Parinda,
561 views
@upsc2020 Exactly 

There is limited storage for E&P companies as oil is transferred to the OMCs on a regular basis

upsc2020,
648 views

hound said

We can buy all that only if we get paid for buying oil. But, we wouldn't get paid.

The negative price for oil would be for oil storing and using companies and not retail consumers. The retail people get oil through channels of storage companies only, but, since they already purchased it for a price and are full, they would like to offset that price from us before buying anymore. If they are able to use reservoirs/inventories before oil prices increase, they and hence govt. might see a slight drop-down in prices and its upto govt. to pass it on to us or not. (Slight as using oil would derive oil demand up and hence prices automatically)

That was detailed. Thanks

parle ji_,
589 views
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