The Problem with Oil
The International Energy Agency (IEA) recently warned that escalating crude oil supply "threatens to overwhelm the logistics of the oil industry — ships, pipelines and storage tanks — in the coming weeks." Apparently, that particular warning didn’t get much press at the time. Yesterday, the IEA prediction came true as the contract price for May delivery of West Texas Intermediate Crude (WTI) crashed in historic and breathtaking fashion, sinking from around $18 per barrel and blowing past zero to close the day in negative territory at -$37.63. (It was around $60 at the beginning of the year before the coronavirus asserted itself.) As dramatic as the plunge was, the explanation is simple and the outcome could easily repeat itself in future months.