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21 votes

Why is the oil future price negative?

This isn't the "oil price" that's going negative; it's the price of WTI Oil Futures contracts for May. WTI Futures contracts mean taking physical delivery in Cushing, Oklahoma (the hub of the US ...
Eugene's user avatar
  • 471
9 votes

Why is the oil future price negative?

The oil spot price didn't go negative, this was future contract price. Basically the future contract expires at a certain date and they have to take delivery. The futures owners were dumping because ...
Frank's user avatar
  • 325
5 votes
Accepted

Why didn't other oil pricing benchmarks such as Brent go negative?

The Brent price is for oil physically delivered in the UK. The price that went negative if for oil delivered in West Texas, US. The physical and economic conditions at the two places are different - ...
simon at rcl's user avatar
5 votes

Why is the oil future price negative?

News say it is because sellers cannot sell it. But, why don't they just hoard it until the coronavirus crisis is off? They can't because their oil storage facilities have a limited capacity. ...
Philipp's user avatar
  • 216
4 votes
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What are the most common methods of determining valuation used by economists that claim Bit-Coin is on the verge of being a bubble

I'll draw from John Cochrane's article and working paper, which provide some great points. Bitcoin doesn't provide dividends or an interest rate, there isn't any payment or reward for saving in ...
one_teach_wonder's user avatar
4 votes

What are the most common methods of determining valuation used by economists that claim Bit-Coin is on the verge of being a bubble

There are two ways to look at the value of a financial instrument. One is the underlying asset base, the other is the yield. Bitcoin has no underlying asset base and no yield. Therefore, its only ...
410 gone's user avatar
  • 8,168
4 votes

Labor time and the exchange value (Marx). What about the quality of the raw materials?

The example you've picked is slightly complicated, because I think there are two possible reasons for the difference in price. Both could contribute at the same time, depending on your view of how ...
Dan's user avatar
  • 1,366
3 votes

How would privately minted coins enter circulation?

I am unsure about the American situation, but I learned a bit of history about token issuance in pre-Confederation Canada. These comments are based on the notes in a token collector guide. Since they ...
Brian Romanchuk's user avatar
3 votes
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How did the Hunt brothers' cornering the silver market drop gold prices in 1981?

Since nobody is answering this, I will point out that the answer is half there. The cornering attempt directly affected the silver price, but gold went along for the ride. People treated gold/silver ...
Brian Romanchuk's user avatar
3 votes

Why do farmers need short hedge?

"Why can't farmers simply sell their wheat ahead of time to buyers who are capable of storing this wheat..." "...sell their wheat ahead of time..." is precisely what a futures contract does. To ...
Michael's user avatar
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3 votes
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Pro and cons to finding coal

It's highly likely that the coal will be pretty much worthless in 20 years from now. That's because we've got far more fossil fuels than we can burn safely: the negative externalities far exceed the ...
410 gone's user avatar
  • 8,168
3 votes

Labor as a commodity

So in modern English, a commodity is a raw material for production or basic agricultural good that can be exchanged for money. Labor, by this definition, is neither a raw material, no one grinds ...
Kitsune Cavalry's user avatar
  • 6,648
2 votes
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If there was world war 3, which stocks should I short?

Gold is generally the best option for expected political and economic strife as it generally reacts inversely with the markets. Here's a good article on the connection between war and the value of ...
TheSaint321's user avatar
2 votes

Labor as a commodity

I cannot comment because of too little reputation. So please note that this response is an extension to the response of Giorgio stating that Marx abstracted labour to a commodity in Das Kapital. ...
Matthias dirickx's user avatar
2 votes
Accepted

What impact would introducing 15 times more soy worldwide do to the price of soy?

Roberts and Schlenker (2013) estimate the price elasticity of demand for agricultural commodities to be about -0.08 to -0.05. These are elasticities estimated over much smaller changes in $p$ and $q$ ...
BKay's user avatar
  • 16.3k
2 votes

What value do virtual traders of commodity add to the market?

There are various important social benefits of commodity trading even just on paper. The main ones are risk management, hedging, providing liquidity and secondary market, and price discovery. For ...
1muflon1's user avatar
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2 votes

Why is the oil future price negative?

This negative price is caused by greedy countries. The usual worldwide oil demand is about 100 million barrels a day. Now, because of the Corona crisis, demand is about 30 percent down, so, ideally, ...
Roland's user avatar
  • 123
2 votes

How does artificial scarcity benefit the seller?

First it is not appropriate to call it scarcity or artificial scarcity, since in economics that term has special technical meaning. Better term would be output/supply restriction. Restricting output ...
1muflon1's user avatar
  • 57.2k
1 vote

Measurement for the downstream use of a commodity

If you are looking for certain commodity data from the US. The USDA Economic Research Service has data on market size of certain commodities. But I am not sure about firm level data. https://www....
Mike J's user avatar
  • 1,467
1 vote

Why do farmers need short hedge?

The cannot sell the wheat ahead of time since they cannot be sure what the yield on their crop will be. That is, they have no idea whether they can fulfil the contract. With the futures position, ...
Brian Romanchuk's user avatar
1 vote

Why has gold dropped during the same week as Deutches Bank faces great difficulties

As Brian Romanchuk commented, there are a number of factors that can affect the daily price of an asset. Gold is one of the most traded futures contracts on the CME so the performance of one bank (...
Andrew's user avatar
  • 11
1 vote

Is it possible to commodify the State?

Yes. For example, the nationalisation of industries brought expanded reproduction into the state function. So do public private partnerships. The generalisation of private sector management standards ...
Samuel Russell's user avatar
1 vote
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How to understand the USDA Demand/Supply report ?

M Acres is million acres, as you suggest Bu is bushel, in theory a volume of 8 US dry gallons, but apparently for wheat at 13.5% moisture it represents a weight 60 pounds. Bu/Acre is therefore an ...
Henry's user avatar
  • 4,765
1 vote

Labor time and the exchange value (Marx). What about the quality of the raw materials?

The value embodied in the raw materials is transferred to the final commodity. So, it is not just the labour necessary to transform the raw materials that forms the value of the final commodity. Why ...
Luís Henrique's user avatar
1 vote

Pro and cons to finding coal

I agree with EnergyNumbers. A few more points on coal however: the value and investment can vary slightly depending on the region of the world you are on. Australia still as significant interest in ...
JoaoBotelho's user avatar
  • 2,155
1 vote

Labor as a commodity

Under the broader definition of commodity (due to Marx, Das Kapital, Volume 1, Chapter 1, Section 1) as some material or immaterial thing that satisfies some human need, that can be owned, bought and ...
Giorgio's user avatar
  • 171
1 vote

Which elements to forecast/estimate Oil/Pretroleum derivatives, would you consider?

Often people will first find a spread between the derivative products and the base one. This spread, is likely to be a reflection of the marginal cost of refining that last unit of the derivative ...
Fix.B.'s user avatar
  • 2,668
1 vote

Why is oil price increasing in May 2016

This may be rather late, but it seems from an article at the time that this was due to supply disruptions in Canada, Nigeria, and Venezuela. Canada was experiencing wildfires which shut down oil ...
the_evictor's user avatar

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