Why the future contracts plunged into negative territory Last May 📉 ?
The Coronavirus, has emptied out our cities, Billions of people are staying at home, and just a few are driving their cars, planes are grounded for many months, and Factories are Idled. The world is burning less oil, but the world's major producers have been pumping more than ever. As a result, the price of oil is falling down, and since there is no demand oil storages are filled up, some oil is stashed at sea on ships. Alongside the US production flooded the market, Saudi Arabia and Russia , decided to produce less and prop up oil prices. But they seemingly couldn't come to term on new cut and started a price war against each other. Meanwhile, US producers continued to pump although prices are tanking and hits a record of more than 13 Million Barrel per day. But why they kept producing ? good question, the Texan oil is hard to extract unlike the other countries, US oil companies borrowed heavily and built pipelines to drill wells therefore they can't stop their production...
