It is far from certain that the price has bottomed out yet, according to several analysts who warn that it is not a fantasy that the price could even fall below zero and force oil players to pay to get rid of the oil - thus at negative market prices.
It is a physical reality in the oil market that oil that is pumped up must be consumed or stored. Otherwise, the cost of storing the oil will eventually exceed the cost of the oil companies to simply give it away to the needy or even pay to get rid of it, predicts Mizuho's commodity analyst Paul Sankey.
"Oil prices may well turn out to be negative," Paul Sankey wrote in an analysis dated Wednesday, where he predicts that stockpiling will be very strained in the world within four months unless surplus supply is squeezed soon. Demand has disappeared while a flood of oil has saturated the market. This will result in 100 billion $ in stranded assets and will make the subprime mortgage look like small potatoes compared to this.
In this current market pattern, it indicates prices at around -9 $/barrel and we should see those prices by June 2021. This will be the end of the oil industry if it occurs.
It is a physical reality in the oil market that oil that is pumped up must be consumed or stored. Otherwise, the cost of storing the oil will eventually exceed the cost of the oil companies to simply give it away to the needy or even pay to get rid of it, predicts Mizuho's commodity analyst Paul Sankey.
"Oil prices may well turn out to be negative," Paul Sankey wrote in an analysis dated Wednesday, where he predicts that stockpiling will be very strained in the world within four months unless surplus supply is squeezed soon. Demand has disappeared while a flood of oil has saturated the market. This will result in 100 billion $ in stranded assets and will make the subprime mortgage look like small potatoes compared to this.
In this current market pattern, it indicates prices at around -9 $/barrel and we should see those prices by June 2021. This will be the end of the oil industry if it occurs.