- Why would a producer pay someone now to take delivery of oil in the future?
- Why are buyers paying the producers money now to take delivery in November instead of getting paid now to take delivery in May?
Edward Millner's blog. It contains links to articles for students taking Principles of Microeconomics and Managerial Economics. It also contains links to articles about politics. The opinions here are mine. No one at VCU reviews or approves what I post.
Monday, April 20, 2020
Producers paying buyers to take oil off of their hands.
The price for delivery in May of West Texas Intermediate (WTI) crude oil fell below $0 today (WSJ, April 2020). The negative price means that the producer pays the "buyer" money now when the buyer agrees to take delivery of oil in May. So many questions arise!
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