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.
CasablancaWe 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)
There is limited storage for E&P companies as oil is transferred to the OMCs on a regular basis
upsc2020,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_,
Write your comment…
