Holy Sh%$

Look Out Below

Oil prices, specifically the price of WTI crude, just fell to almost NEGATIVE $40 a barrel today.

Part of this was an artifact of the calendar, futures contracts were coming due, so stockbrokers were facing the possibilities of thousands of gallons of crude oil being pumped into their swimming pools, but this is f%$#ed-up and sh%$.

When you consider the fact that fracking is a particularly expensive way to extract oil, and that the best evidence is that it has never been profitable, there are going to be a whole bunch of eager investors left holding the bag:

Of all the wild, unprecedented swings in financial markets since the coronavirus pandemic broke out, none has been more jaw-dropping than Monday’s collapse in a key segment of U.S. oil trading.

The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory — minus $37.63 a barrel. The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American energy companies have run out of room to store it. And if there’s no place to put the oil, no one wants a crude contract that is about to come due.

Underscoring just how acute the concern is over the lack of immediate storage space, the price on the futures contract due a month later settled at $20.43 per barrel. That gap between the two contracts is by far the biggest ever.

“The May crude oil contract is going out not with a whimper, but a primal scream,” said Daniel Yergin, a Pulitzer Prize-winning oil historian and vice chairman of IHS Markit Ltd.

There is a whole bunch of money from a whole the “smartest people in the world” that just got lit on fire.

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