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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

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
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
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Simple model to predict oil prices

The most comprehensive survey of estimating oil prices is here. There you fund from very complicated models to very simple ones. As the article shows, the ultimate answer depends on whether you are ...
luchonacho's user avatar
  • 8,591
4 votes

Was the 2008 financial crisis caused more by the US subprime mortgage lending or more by an international energy and oil pricing crisis?

It's worth differentiating between the financial crisis of 2007-2009, and the recession that began in December 2007. The financial crisis was indeed caused by a run on wholesale funding that was ...
dismalscience's user avatar
3 votes
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Who pays the current price of oil?

For short, if someone buys physical oil, they need it for something. It is awful stuff, that really cannot be used for anything without processing (apart for being used as fuel in large vessels maybe)....
AKdemy's user avatar
  • 4,122
3 votes

Why are the gas prices so high in the US and why does it depend on OPEC+?

Correction of Some Misconceptions in the Question First of all, on any market where prices are not fixed, price always depends on demand and supply. However, government policies can affect supply and ...
1muflon1's user avatar
  • 56.9k
3 votes

Why is oil being traded in U.S. dollars?

why would they force to trade in U.S. dollars instead of just taking the oil from their country by force? One of the basic tenets of power is that $control$ is superior to $ownership$. War is ...
heh's user avatar
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3 votes
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Oil price decreases due to supply decrease?

Refineries need oil to produce chemical products. Therefore, it means declining demand for oil and falling prices according to demand supply principles. The point is refineries which use oil as ...
Jeffrey's user avatar
  • 63
3 votes

Russian ruble drop in value due to low oil prices

The Rouble depreciates against the US dollar because of demand and supply. Think of it as a story that goes as follows: a) In the ruble/dollar market, the supply of dollars consists of foreigners ...
Fix.B.'s user avatar
  • 2,668
3 votes

How helpful is Hotelling's Rule in determining the price of oil?

It would be easy enough to subject the question to simple quantitative analysis - get the time-series of historical oil prices and away we go. Or, we can take a quick qualitative approach and get the ...
410 gone's user avatar
  • 8,168
3 votes
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Why do E85 prices track gasoline prices?

In the U.S., most ethanol is corn ethanol. Research indicates that corn ethanol has an energy return on investment ratio of between 0.84 and 1.65. This means, basically, that it takes almost as much ...
LShaver's user avatar
  • 166
2 votes

Why were petroleum product prices increasing in India in 2016, despite countervailing trends in the international oil market?

To repeat EnergyNumbers's comment as an answer to this question, the following chart from the St Louis Federal Reserve shows the increase in the crude oil price in US Dollars in the first half of 2016....
Henry's user avatar
  • 4,765
2 votes

How are petro states able to maintain gasoline subsidies without black market export smuggling?

There has been rampant smuggling from Venezuela to Colombia - see links below. This is the basis for my question. http://www.wsj.com/video/colombia-black-market-gas-trade-/BC14C5B7-69A0-4A0E-84B2-...
John B's user avatar
  • 73
2 votes

Crude oil benchmarks and production places

This article states: Brent, WTI and Dubai-Oman are the main crude oil benchmarks of the current oil pricing system. Nearly all oil traded outside America and the Far East is priced using Brent ...
luchonacho's user avatar
  • 8,591
2 votes

Why does a lack of pipelines cause Canadian crude oil to trade at a discount compared to US crude oil?

If you take the oil price as a given, meaning not set by Canada but by the market, then the costs of more expensive transport will eat the profit margins. For example, if the price of the oil is 100 ...
JoaoBotelho's user avatar
  • 2,155
2 votes

Why is oil being traded in U.S. dollars?

I'll try to answer your question as best as I understand it. There are innumerable reasons for why taking oil by force from these nations would be seen as unnecessary by the US, for both political ...
Emil's user avatar
  • 21
2 votes
Accepted

How exactly did Venezuela's economy fail?

I think you summarized most of it quite well. Few things that you missed: There was a host of bad macro and microeconomic policies. For example, nationalization of many firms, price controls, ...
1muflon1's user avatar
  • 56.9k
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

Oil prices forecast methods

There is a lot of literature on this question. This review looks like a good place to start although it is from 2013. It looks at a wide range of both qualitative and quantitative approaches. ...
Brian Z's user avatar
  • 436
2 votes
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Why has France been hit so hard by rising petrol prices?

Why has France been hit so hard by rising petrol prices? Because restrictions on Russian oil increase world oil prices as well. As you can clearly see from the data there was sharp increase in US, ...
1muflon1's user avatar
  • 56.9k
2 votes
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What will be the Effect of the Russian oil Price Cap

What will be the effect of this cap- will it be an effective economic sanction? The effect will be that Russia gets less revenue from EU and the west for the sale of their oil. Yes, according to ...
1muflon1's user avatar
  • 56.9k
1 vote

Effect on price of sudden oil supply drop

In real-time nobody can know the answer, but using Dario Caldaraa, Michele Cavalloa and Matteo Iacoviello 2019 estimates of price elasticity of supply for oil from 1985 to 2015 which was -0.1 (this ...
csilvia's user avatar
  • 2,734
1 vote
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Why would oil suppliers choose a lower priced contract?

This is because for the price comparison it is not relevant what the exchange rate is now but what it will be at the time of delivery. The difference between these corresponds to different ...
1muflon1's user avatar
  • 56.9k
1 vote

Why could boasting oil during the current drop in oil demand be good for Saudi Arabia?

The country's funding costs are very low in comparison: at an average of 25 per barrel (in comparison: Russia is funding for 45, the fracking, which is mainly carried out in the United States, ...
Albrecht Hügli's user avatar
1 vote

Why is oil being traded in U.S. dollars?

why would they force to trade in U.S. dollars I'm not seeing any evidence that "force" is the appropriate word. As a piece from The Balance succinctly describes, there was a parallel ...
Brian Z's user avatar
  • 436
1 vote

Crude oil price changing factors

A few fundamentals to state: equilibrium prices drives from both supply and demand. these curves are functions of quantity. The supply chain is an average of all MC functions of all firms. As you ...
Guy Louzon's user avatar
1 vote

Crude oil price changing factors

Why have prices gone up? Because supply was less than demand. The price has now increased, to bring supplies onto market, and to reduce demand. Will it go higher? No one knows. The market thinks not,...
410 gone's user avatar
  • 8,168

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