Meanwhile, as Bitcoin surges $7,000+ and tries to break major resistance level and dropped back at the 6,500-6,900 zone. For the first time in Oil market history Oil market just did something that made even all wonder. It even made market veterans shake their heads. The May contract for West Texas Intermediate crude oil on the New York Mercantile Exchange closed in the negative territory.
I’m not sure how to react to that other than say that nobody, whether they’re 120 years old or whether they’re 20 months old, has ever seen an oil price lower than this
A very rare observation and reaction by a 40-year market veteran, head of global market analysis for Oil Price Information Service, Tom Kloza told MarketWatch https://www.marketwatch.com/
Implications and Thoughts
Now frens, to summarize this situation, a negative price in oil barrel would mean companies and investors will have to pay someone to take the oil off their asses. 😂 Now that is crazy.
These negative price in the market exchange had also been a clear sign of a fall of a commodity due to this Corona Virus (Covid-19) pandemic we are on. Needless to say, when you are new to markets, this figures would also seem a sign for similar commodities like gasoline to follow, but clearly, I tell you it won't completely follow. In a logical situation, a cheaper price for a similar commodity like gasoline might experience a little bit pump on the price. Why? It is because gasoline and other similar commodities might be the very potential positive prospect for hard-hit fellas.
All thanks to Covid-19, the demand and supply curve for oil has become upsidedown as we all have lockdowns worldwide simultaneously. Now you might ask...
Can I really go out look for Oil and get paid? Cheaper Gas?
Now you are nuts my friend, that's a no... for now, I guess. Theoretically, the futures market where Oil price gone zero, and negative, more like has its own world than the real environment we are in. In the futures market, the decisions buying and selling power of traders are at work. we can't really go outside pick barrels of oil and literally get paid by companies. BUT, as this pandemic and its effects goes on and on, the turmoil on trading markets would then be prevalent. Major affected commodities similar to oil would also be affected after some time.
I'm All in Crypto, What's New?
Well, as the whole economy started to fluctuate, cryptocurrency value could also be affected. Think of it, bitcoin is somewhere around 6800 at the moment of writing this (provided below the current price anyway). Now what would happen if all the whole economy breaks real hard. They can't just go burrrrrrrrrrrrrrrrrrrrr and print zillions of paper bills again, if they do, the value of paper bills will be affected.
Wait what? Will bitcoin lose its value too?
Absolutely not, well it depends on this current pandemic. But in markets, we also have this so called intrinsic value. I think Bitcoin, as a currency, will then have a separate valuation from its investors and believers, consecrating its inherent value into a mutual appreciation. Well, that if world economy really shatters. It's still a little far in the future my fren, relax. Or is it? 😂
Leave a comment below and share me your thoughts about this!
As always, the photos are from their respective owners, not mine. Credits to them.
