April 25, 2020 – CNBC
‘Scary,’ ‘visceral,’ ‘unprecedented’: Traders describe oil’s wild week and fall to negative prices
By Pippa Stevens
“Scary,” “unbelievable,” “so dramatic,” “unprecedented,” “very visceral”: These are among the choice words Wall Street veterans used to describe what was, for the oil market, a week for the history books.
On Monday, for the first time on record, West Texas Intermediate (WTI), the U.S. oil benchmark, plunged below zero and into negative territory. Before Monday, many thought this was impossible. Maybe, just maybe, it could drop to zero, effectively erasing all value. But negative territory seemed unimaginable, not least because it’s hard even to wrap one’s mind around it. Pay someone to take your oil?...
Read the full article here: https://www.cnbc.com/2020/04/25/scary-visceral-unprecedented-traders-describe-oils-wild-week-and-fall-to-negative-prices.html
…That prices kept falling deeper into negative territory after crossing zero is what most surprised RBN Energy CEO Rusty Braziel.
“That’s what freaked everybody, was the fact that these guys were in such dire circumstances,” he said. “There was not a single soul that I have talked to that came anywhere close to predicting what happened.”
Braziel has been in the energy industry for decades, first as a trader and now as a consultant. While trading, he experienced his fair share of volatility — including the 1986 crash that sent oil prices tumbling below $10.
The heavy selling on Monday, rather than Tuesday when the contract was set to expire, was also notable, he said.
