Industrial and Commercial Times Society
In early March, Saudi Arabia opened a crude oil price war, and the epidemic in the new crown pneumonia (COVID-19) was under the duality of the global raging, and the international crude oil market price had fallen sharply.Unexpectedly, in the early morning of April 21st, Taiwan time, the second trading day of Western Western (WTI) crude oil futures, the price of futures contracts fell sharply with free landing.It even fell to $ 40 per barrel, and the final settlement was at a negative $ 37 per barrel, causing energy stocks to fall 3.29%, and it also dragged down the S & P 500 Index (SP 500) closed down 1.79%.
Even though some experts reminded the possibility of negative oil prices a few days ago, such a dramatic decline and the amount of negative oil prices still surprised market experts.After all, according to the trading rules, if a buyer buys a bite of the WTI crude oil futures in May before closing on April 21, when the spot is delivered, in addition to taking 1,000 barrels of crude oil (CME's WTI contract is 1,000 barrels), and you can also receive $ 37,000 paid by the seller.
There will be such losing money for business logic, mainly because most participants in the financial market are unable to conduct spot delivery, so that before the final trading day of the futures (April 21), there is no spot delivery capacity before the futures.Traders must transfer or close their positions to avoid breach of contracts due to the unable to settle in stock, so that a large number of unprepared selling on the settlement date.Under the imbalance of the commissioning book of the transaction, the futures trading broker of the price recipient can only be passively responded, which also highlights the need to strengthen risk control.
Some people may wondering that global crude oil futures trading has been for decades, and the demand for futures warehouses is also a daily trading. Why has no negative oil price in the past?Three main reasons for in -depth exploring are:
First of all, the new coronary pneumonia epidemic continues to be burned around the world, and the frozen frozen demand causes crude oil storage space to overflow.Data show that the demand for reduced epidemic conditions exceeds 30 million barrels per day, which is about three times the reduction of national organizations and partnerships (OPEC+) and the United States, Canada, and Brazil from May.The slow progress of US crude oil production has caused global crude oil storage equipment to be close to full load, and the cost of oil storage has risen sharply.Many people who have the ability to be in stock have to be transferred or liquidated because they can't find the storage equipment or are unable to afford it.
Secondly, the greed of a large number of crude oil transactions has become the promoter of the price storm.Since international oil prices have plummeted since March, attracting speculators to pour a lot of bottoms in the futures market when recognizing the substantial imbalance of supply and demand in the international crude oil market.In early April, the WTI futures expired WTI futures contract reached 630,000, which was much higher than the 430,000 ports of the WTI contract expired in April.As a result, the crazy selling pressure on the day of the settlement appeared.If you observe the transaction price and amount of information on the day of April 21, you can find that the largest two transaction volume appears at the price of $ 10 per barrel of $ 10 and $ 0, respectively, revealing the crazy speculators who have been copied to the last moment.Footprints are also the cause of oil prices.At this time, if the investor does not advance the risk hedge operation on a trading platform that supports negative quotations and transaction functions in advance, the risk of transaction will inevitably increase significantly.
In the end, this crude oil price showed a cliff -like fall, and once again showed the decision -making mistakes of the young crown prince of the Saudi Kingdom. The suicide oil war started by the Saudi country is the deep factors of the out of control of oil prices.In the context of increasing demand, at the OPEC+conference in early March, Saudi and Russia launched a price war on the left and Russia's opinions on production reduction, which caused international oil prices to fall more than 50%.The huge decline pushed the volatility of oil prices and attracted the swarmed speculators. This is also the key to the negative value of WTI crude oil futures on April 21 in May 21.If OPEC+adopts a stable regulation mode in early March, that is, the control supply according to the degree of demand to control the decline in oil prices, then the crude oil futures market should not have this wave of excessive speculation.
As for whether negative oil prices mean that there is no value for crude oil?the answer is negative.Crude oil is widely used and has its own inherent value.The negative value of the WTI futures price is the phenomenon of trading disorder in the futures market. It does not mean that the actual value of crude oil spot is negative.
In the long run, even if Brent crude oil is unlikely to fall into negative value because of cash settlement, because its crude oil futures price is extremely positive with WTI, it is difficult to escape the WTI drag, and the settlement has plummeted by more than 20%, While Dubai's crude oil index of the Middle East crude oil spot has also fallen sharply due to the influence of the two major futures prices, respectively.No wonder the oil price report of the New York Federal Reserve Bank shows that the explanation of supply and demand is increasingly lower and lower in the face of crude oil prices, and changes in futures market prices often lead to a significant deviation of spot prices from the fundamental trend.
So, with the continuous fever of the global new crown pneumonia, will the WTI futures contract again have negative oil prices in June?According to the current situation, the opportunity to reproduce negative oil prices in June should have been reduced.One is that the speculators of the market will not repeat the same mistakes, and they will inevitably be transferred in advance; second, the crude oil supply country will officially reduce production in May, providing a little support for oil prices; third, as the price of oil is at a rare low -end, countries will accelerate the expansion of expansion.Oil storage space.In other words, the phenomenon of negative oil prices for money and oil should not become the norm.However, as far as the financial market is concerned, trading risks are always hidden in the fragility of human nature. While investors chase high profits, they must never ignore the need to use different transaction strategies and tools to explore risks in a timely manner.
