Negative Oil Prices Explained

World News

Negative Oil Prices Explained

This video was made possible by our Patreon community! ❤️
See new videos early, participate in exclusive Q&As, and more!
➡️ https://www.patreon.com/EconomicsExplained

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

Earlier this week we’ve started seeing articles noting that oil prices have now gone into the negatives (meaning investors are paying to give away their oil).

What is going on here? How does this make sense?

As always with these weird and wonderful things, it’s all basic economics. And to properly understand this, we’re going to need to look at 3 things: Negative value items, the 2020 oil market, and how oil is actually sold!

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

📚 Want to learn more about oil? We recommend reading “Oil 101”, by Morgan Downey
👉 https://amzn.to/2XMN59X (as an Amazon Associate, we earn from qualifying purchases)

Enjoyed the video? Comment below! 💬
⭑ Subscribe to Economics Explained 👉 https://bit.ly/sub2ee
⭑ Enjoyed? Hit the like button! 👍

Q&A Streams on EEII (2nd channel) → https://www.youtube.com/channel/UCOTgNyfQG4vVP5sCXrJaS4g

✉️ Business Enquiries → [email protected]

Follow EE on social media:
Twitter 🐦 → https://twitter.com/EconomicsEx
Facebook → https://www.facebook.com/EconomicsEx
Instagram → https://www.instagram.com/EconomicsEx…
Discord → https://discord.gg/MJGcTH6

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

#OilMarket #Recession #Economics

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

Sources & Citations –

Lee, K., Ni, S., and Ratti, R.A., 1995. Oil shocks and the macroeconomy: the role of price variability. The Energy Journal.

Pirrong, C., 2011. The economics of central clearing: theory and practice.

Guay, W., and Kothari, S.P., 2003. How much do firms hedge with derivatives?. Journal of financial economics

Pirrong, C., 2009. The economics of clearing in derivatives markets: Netting, asymmetric information, and the sharing of default risks through a central counterparty. Asymmetric Information, and the Sharing of Default Risks Through a Central Counterparty

Articles –

– nytimes.com/article/negative-oil-prices-facts-history.html

– forbes.com/sites/sarahhansen/2020/04/21/heres-what-negative-oil-prices-really-mean/#2c19d87a5a85

– barrons.com/articles/negative-oil-prices-from-the-folks-who-brought-you-the-financial-crisis-51587549601

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

EE Fan Exclusive Offer:

Sign-up for Acorns! 👉 https://www.acorns.com/ee (after registration, Acorns will deposit $5 in your account to help you get started with investing!)

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

ECONOMICS EXPLAINED IS MADE POSSIBLE BY OUR PATREON COMMUNITY 👊🙏
Support EE by becoming a Patron today! 👉 https://www.patreon.com/EconomicsExplained

The video you’re watching right now would not exist without the monthly support provided by our generous Patrons:

Morgon Goranson, Andy Potanin, Wicked Pilates, Tadeáš Ursíny, Logan, Angus Clydesdale, Michael G Harding, Hamad AL-Thani, Conrad Reuter, Tom Szuszai, Ryan Katz, Jack Doe, Igor Bazarny, Ronnie Henriksen, Irsal Mashhor, LT Marshall, Zara Armani, Bharath Chandra Sudheer, Dalton Flanagan, Andrew Harrison, Hispanidad, Michael Tan, Michael A. Dunn, Alex Gogan, Mariana Velasque, Bejomi, Sugga Daddy, Matthew Collinge, Kamar, Kekomod, Edward Flores, Brent Bohlken, Bobby Trusardi, Bryan Alvarez, EmptyMachine, Snuggle Boo Boo ThD, Christmas

Leave a Reply

Your email address will not be published. Required fields are marked *