'This is crunch time': Goldman Sachs analysts explained why oil plunged below $0, and warned it could happen again
'This is crunch time': Goldman Sachs analysts explained why oil plunged below $0, and warned it could happen againGoldman Sachs analysts explained why oil prices went negative and warned they could again during a call with clients this week, which was replayed on thePrices fell below zero because exchange-traded funds held on to oil futures contracts until two days before they expired, forcing them to pay someone to take them before the oil was physically delivered to the nearly full...
The analysts cautioned that the combination of weak demand, excess supply, and a shortage of storage made it likely that oil prices will drop below zero again next month.Goldman Sachs analysts explained why oil prices turned negative during a call with clients this week, and warned it would likely happen again next month.
The upshot was that the price of West Texas Intermediate crude dropped well below $0 on Monday. It has now rebounded to above $15,The magnitude of Monday's price drop caught the Goldman analysts off guard. Normally, negative oil prices signal that producers are willing to pay someone to cart their oil away to avoid halting production, Jeff Currie, global head of commodities research, said. They also reflect the costs of transporting the oil.
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