Crude Oil Futures Contract Drops Below $0 (Companies Paying People to Take the Oil)

Here’s an indication of where the global economy is at.

CNBC:

A futures contract for U.S. crude prices dropped more than 100% and turned negative for the first time in history on Monday, showing just how much demand has collapsed due to the coronavirus pandemic.

But traders cautioned that this collapse into negative territory was not reflective of the true reality in the beaten-up oil market. The price of the nearest oil futures contract, which expires Tuesday, detached from later month futures contracts, which continued to trade above $20 per barrel.

West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands.

This negative price has never happened before for an oil futures contract. Futures contracts trade by the month. The June WTI contract, which expires on May 19, fell about 18% to settle at $20.43 per barrel. This contract, which was more actively traded, is a better reflection of the reality in the oil market. The July contract was roughly 11% lower at $26.18 per barrel.

The international benchmark, Brent crude, which has already rolled to the June contract, settled 8.9% lower at $25.57 per barrel.

The entire economy was a bubble, and the bubble has popped, and you just don’t know it yet because the weird government locked you in your house.

The hell that is coming down simply cannot be overstated. We are going to hit 50% unemployment by summer, and it will probably go further.

In real terms, this means heroin addicts laid out on the streets of every city and town, mass homelessness, riots and other civil unrest – all with the backdrop of telling you you can’t stand next to someone because of the flu.

The hilarious part is that there is literally no path to repairing the economy. Once it collapses, the only possible thing to do would be to basically rebuild it from scratch by building factories to make basic products.

I’m really not sure that America has the will to do something like that, so it is more likely that the country will simply become progressively worse until it eventually becomes ungovernable.

It’s gonna be a wacky ride.