• Rajat Kulshrestha

Crude oil fall below $0 a barrel

Some might say you will get paid to buy oil, This sounds funny but it's not actually true.

The reasons that led crude oil fall below $0 are -

  1. The Demand has crashed.

  2. Oil Refineries like IOCL, HPCL don't have have space to store it.

Due to the shutdown of operations in the Airline Industries, Use of Commercial vehicle by general public, Manufacturing Industries, etc which accounts the maximum usage of consumption of Oil.

So the major Oil production companies in UAE, Iran, Russia, Saudi Arabia, United States of America are being paid to store.

and when the company starts storing the oil for others, that means demand has gone to zero. And if the demand has gone 0 with the production stored in inventory that leads to the fall in price, and in some cases price can be lead to negative, just like crude oil.

Greater the Demand, Higher the Price

Lower the Demand, Fall in Price

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