I need to go back over previous oil messes... I know it'll return I just don't know with the mess we're seeing that'll hit entire market. I honestly didn't think it'd be this low though regardless, oil will definitely return though like you mention
Well, it will be back at $20+ tomorrow when they start measuring June prices. Today's crash is a pure fluke of circumstance. If people buy oil today, they have to take possession of it in the next few weeks, and no one has anywhere to store it. So there's literally zero demand for this front month contract - and people who bought these futures contracts don't want to have to take possession of tankers full of oil, so they have to sell at any price before the contract expires tomorrow. If we're still shut down in the month, we'll see the same thing play out at the next expiration date. This is where Trump should invoke the strategic reserve and refill that whole thing for basically free.
I'm thinking uco, huge inflow atm - need to look at contract/split 1 for 25 reverse split - could be dangerous with more to lose but huge surge on inflow...
To be fair, he was probably referring to Brent crude rather than WTI. Brent didn't have this collapse because their futures contract expired differently.
If I want to play in oil I will buy royalties at auction. Ironic, because when I first started buying them oil was 18-19 bucks a barrel. World has come full circle.
USO or OIL - I would stay away from UCO until they do their 1 - 25 reverse split that sounds like it may happen tomorrow.
Yes, tomorrow is date - just checked now (unless it changes). Could be a mess though for sure, I think the volume is interesting but not something to go hard on until after
This may be a stupid question, but I'm not sure how ETFs on oil & gas works. I noticed that the ETFs have not dropped in value in line with the WTI price. Is the WTI crash factored into the current ETF price at the moment? If not, shouldn't I wait to buy?
All of these things have massive roll yield that's going to crash their values over time. Unless you plan to only hold a week or two, they are likely going to lose value even if oil prices go up. WTI is now at negative $8. Just the roll for tomorrow is going to be a nightmare (if they are front month ETFs - not sure which ones hold what). These ETFs may have to pay $8 to get of their May contracts and pay $20 to buy June ones for today's roll. Normally they'd sell their May for like $19 and buy June for $20. Unless you really understand the underlying math behind these things, stay away.
Aaaand there it is... -$6.50... lol. I never thought I’d see it... Now to see what the June contract does because it was getting down to $21.
The ETFs don't just hold oil that's expiring tomorrow. They own a combination of futures contracts - so most of their oil contracts are still valued at +$20. Each ETF works differently and it's important to understand what specifically they hold and how they roll it over each day.
Every single person who owns a May contract has to sell it today unless they want to take possession of oil. Meaning every Wall Street oil trader is panicking right now and having to pay people to take these contracts off their hands. It's now at $-14. Not sure when expiration is, but it could go haywire between now and then.
