Loading ...FROM MURPH LAST NITE=
Today was without a doubt the most mindboggling day in US futures history with the price of spot WTI crude oil falling to a negative price of $37.63 per barrel. Am sure that most anyone who traded futures to any meaningful degree never even comprehended that a negative futures price for a commodity was even possible. How bizarre is this? This evening May crude is shown to have rallied $25.87 per barrel and is still a negative $11.76 per barrel. It is beyond mindboggling.
The situation was so bad today in crude oil that a pro oil trader would not buy a May futures contract late in the day, say for a minus $30, which means he would get paid $30,000 plus get 100,000 barrels of crude oil for free, and yet it was not done or the price would not have closed where it did. How bad is that? A futures trader could have done that trade and simultaneously sold a June futures contract at say $22 per barrel and delivered on that contract on Wednesday. That means all the oil guy trader had to do was have a home for crude oil (with anybody) for ONE day IF he got delivery tomorrow. And mind you, the earliest buyers on the Comex books of oil get delivery, not the latest on the books. That is the delivery process. Of course, if you own May oil tomorrow through the contract close, you own it. But as of tonight, you could have already sold the May contract via a June futures sale for a quick $50,000 profit. NO takers.