The US Energy Information Agency (EIA) dissects the historic event.
“It’s not often that we’re served up a WTF moment like this,” I wrote on April 20, when the May contract for crude-oil benchmark-grade West Texas Intermediate (WTI) plunged to minus -$37.63 in a straight line, thus violating the WOLF STREET beer-mug dictum that “Nothing Goes to Heck in a Straight Line.” It was the first time in history that a US crude oil futures contract plunged into the negative. The peculiar dynamics that came together and caused this are expected to continue and some of them are expected to get worse over the next month or two. So here is the postmortem of this infamous day, by the US Energy Information Agency (EIA).
By the Energy Information Agency:
WTI crude oil futures prices fell below zero because of low liquidity and limited available storage.
On Monday, April 20, 2020, New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) crude oil front-month futures prices fell below zero dollars per barrel (b)—at one point, trading at -$40.32/b (Figure 1)—and remained below zero for part of the following trading day. Monday marked the first time the price for the WTI futures contract fell below zero since trading began in 1983.
Negative prices in commodity markets are very rare, but when they occur they typically indicate high transactions costs and significant infrastructure constraints.
In this case, the WTI front-month futures contract was for May 2020 delivery, and the contract was set to expire on April 21, 2020. Market participants that hold WTI futures contracts to expiration must take physical delivery of WTI crude oil in Cushing, Oklahoma.
Typically, most market participants close any futures contracts ahead of expiration through cash settlement in order to avoid taking physical delivery, and only about 1% of contracts are physically settled. The extreme market events of April 20 and April 21 were driven by several factors, including the inability of contract holders to find other market participants to sell the futures contracts. In addition, in this case, the scarcity of available crude oil storage meant several market participants could not take physical delivery at expiration and resorted to selling their futures contracts at negative prices, in effect paying a counterparty to take hold of the contracts.
Crude oil and other commodities are traded on futures markets, which are financial exchanges that market participants use to manage risk in a variety of businesses, including but not limited to, upstream crude oil production, refining, shipping, and wealth management. Because they can be delivered physically, prices for WTI futures contracts, for the most part, converge with spot market prices after expiration.
The spot market reflects cash transactions for physical buying and selling of the underlying commodity. For more information on the interaction between physical commodity markets and financial markets, the U.S. Energy Information Administration (EIA) provides explanations and updated material on its web page What Drives Crude Oil Prices?
The terms and conditions contained in the settlement procedures of the May 2020 WTI contract as stipulated by CME Group—which owns and operates the NYMEX on which the contract is traded—are key to understanding the recent price activity.
On expiration, the holder of a WTI contract has two options to meet the contract’s physical delivery requirement:
First, up until 2:00 p.m. on the business day following the expiration date, a contract holder can settle the position by entering into an Exchange for Physical (EFP) contract with a counterparty, which transfers the contract to a counterparty in exchange for cash or other futures contracts with later expirations.
Second, settlement can also occur if a contract holder takes physical delivery of the crude oil. As per the NYMEX contract’s specifications, delivery of the physical crude oil volumes must occur at a pipeline or storage facility in Cushing, Oklahoma, with pipeline access to Enterprise Product Partner’s crude oil terminal or Enbridge Inc.’s crude oil terminal. This delivery must also occur within a specific time, which is currently set no earlier than the first calendar day of the contract month and no later than the month’s last calendar day.
Under normal conditions, taking delivery of crude oil at Cushing is straightforward. Buyers can have the oil transferred into a storage facility or pipeline that they own or lease. Or, with the seller’s consent, they can transfer ownership of the crude oil somewhere else in the pipeline and storage system.
Normal physical settlement has been disrupted, however, by the recent decline in the availability of uncommitted crude oil storage capacity. Because of the impact of the 2019 novel coronavirus disease (COVID-19) on economic activity and the consumption of petroleum products, U.S. consumption of crude oil and petroleum products has sharply declined. As of the week ending April 17, U.S. refinery runs fell to 12.8 million barrels per day (b/d), 4.1 million b/d (24%) lower than the same time last year.
As a result of this extreme demand shock, excess imported and domestically-produced crude oil volumes have been placed into storage. Crude oil storage facilities at Cushing have 76 million barrels of working storage capacity, of which 60 million barrels (76% after accounting for pipeline fill and stocks in transit) were filled as of April 17 (Figure 2). Although Cushing has physically unfilled storage available, some of this physically unfilled storage is likely to have already been leased or otherwise committed, limiting the uncommitted storage available for contract holders without pre-existing arrangements. In this case, these contract holders would likely have to pay much higher rates to storage operators that have uncommitted space available.
Although data for storage costs are limited, the increased demand for storage has likely placed significant upward pressure on crude oil storage costs. Trade press reports of high on-land storage costs, high rates for crude oil maritime shipping (which can be used as an alternative to on-shore storage), and high levels of contango (when near-term futures prices are lower than longer-dated ones) all reflect an increase in storage costs since early March 2020.
The inability of some market participants to take physical delivery meant that they had to settle the May 2020 WTI contract financially by selling the contract to another market participant. As a result, owners of the May 2020 WTI futures contract most likely had to sell at lower prices to exit their contracts and avoid physical settlement. In this extreme market environment, several participants had to sell at negative prices—that is, pay the other party to take hold of the contract before expiration.
Theoretically, a contract holder could choose or be forced to fail to take physical delivery of the crude oil cargo, although doing so is likely to be costly. The specific costs associated with a failure to accept physical delivery depend on the specific contractual arrangements entered into by the futures contract holder and the Futures Commission Merchant (FCM)—the entity responsible for executing the buying and selling of futures contracts on behalf of a client.
The possible costs could include a combination of direct monetary penalties, reputational consequences, the liquidation of the collateral deposited by the client in the margin account with the FCM, the revocation of trading privileges, and the costs of any legal settlements resulting from the breach of contractual obligations. As a result, holders of expired contracts obligated to take physical settlement rarely fail to take delivery.
Taken together, these factors suggest that the phenomenon of negative WTI prices could be confined to the financial market, with few physical market participants paying negative prices. The positive pricing of other crude oil benchmarks (with the Brent contract for June 2020 delivery closing at $19.33/b on April 21), positive prices for longer-dated WTI prices, and positive spot prices for other U.S. crude oils suggest that the recent price action was predominantly driven by the timing of the May 2020 contract expiration.
The availability of storage in Cushing will remain an issue in the coming weeks, however, and could still result in volatile price movements in the June WTI futures contract or other U.S. crude oil spot prices that face limited storage options. EIA will continue to monitor these market developments. By the Energy Information Agency
By how much will economic activity in the US plunge? “Three times deeper than the Great Recession?” Read... How Far Will the U.S. Economy Plunge During Lockdown?
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I was under the impression that a big part of the problem was that USO (an ETF that buys oil furtures) kept rolling over (buying) the same amount of WTI futures contracts as before the the demanded dropped due to Coronavirus.
With USO reportedly holding about 25% of the outstanding contracts in a typical month, one could see how a drop in oil consumption could mean that way too much oil was being ordered via the futures contracts.
So was it all due to USO, or was other speculators also ordering the same amount as before? And how much ash actual oil CONSUMPTION dropped?
I don’t think this was about USO- they had already rolled their futures position forward into June.
USO has a big problem, however. They hold something like half a billion barrels in futures contracts due to huge inflows (~30% AUM increase in one week), and their roll-forward plans are well known (May 5-8). They are going to be front-run into oblivion unless they move now which I think they are doing.
right, the (long) specs in this market hide behind the ETF.
The sky is not falling – yet.
Wolf — how are you positioning yourself for the coming May debacle?
I am looking forward to buying the NEGATIVE futures OPTIONS on the June /CL contract.
I will hedge this with interest RATE SWAPS with EUR, CHF, INR, CZK.
We then tie this up selling CRACK COCAINE in the SF North Beach district, near the Condor club.
I have eliminated all fat-tail risk. It is the perfect trade.
This was the biggest example of amateur hour I have seen in 10+ years. All these small traders had no idea that they had to take delivery of 1000 barrels of oil for every contract. They deserve to lose their money.
Or maybe some intermediary BS’d them into investing in commodities (“A Historic Opportunity!!”), so maybe it was cluelessness with an assist…
Hi Wolf, I’m a professional prop trader. I just want to point out that the cash-settled ICE WTI futures expire to the penultimate NYMEX WTI settlement price…
Not knowing who is who here, is it possible the people who owned the storage saw this shortage and pulled back, at the same time shorting the market? Then they could in theory buy up the cheap oil, and store it for themselves? I don’t necessarily believe that would be unethical, anyone who buys oil to store while market prices are falling is taking on some risk. You pay the bills and the product is worth even less next month? Simply if you allow everyone to go bankrupt, what’s the point of capitalism?
If you’ve got storage just refuse to lease it. Then take it at minus any amount and sell it next day or so into the spot market. Eia says demand down 25%, but us production up yoy, so production must decline maybe 30%… who shuts in? OPEC has same question.
and here i had always thought a short position had limited upside (can only go to zero) and unlimited downside (can go to the moon).
Gulf Coast and West Coast are a tanker parking lot. 30% drop of world demand . The June contract of $17 is almost out of touch with reality as the – $30 prices. Gold and silver are not available at Comex spot prices. There was a lot more going on other and before c19 that has yielded these distortions and they are not disconnected . The common element are the central banks.
Oil was over-available so price went south. Unavailable gold and silver should be going north, right?
I believe I just read that Deep Horizon is going gangbusters.
Yeah they’ve been covering it in the local news. Just rows of these gigantic tankers parked off the coast of Long Beach.
Those rows of tankers are nothing compared to those off Fos-sur-Mer, ARA, Malta and especially Singapore.
I’ve never seen anything like this, not even in 2009.
The good news is there are now dozens of tankers in the Persian Gulf waiting to load crude at the present ridiculous spot prices (even the gigantic oil terminals at Al-Juaymah can only load so many tankers at any time) to fill strategic reserves and fuel the recovery in China, Korea and Taiwan.
Tinpot refinery owners, rejoice!
One of the world’s largest suppliers of bunker and other fuels based in Singapore, founded in 1963 has gone bust after massive frauds. Unusual aspect apart from obvious is that the founder, known as ‘OK Lim’ has said ‘Yes I did it, I instructed accounting to hide losses’
The losses are in the billions.
The assumption is that he had contracted for supplies before the crash.
If Lim is protecting his son, who says he knew nothing, it remains to be seen whether he’ll have better luck than Madoff’s kids.
“WTI crude oil futures prices fell below zero because of low liquidity and limited available storage.”
On a longer term scale that “low liquidity” happened because the financial sector is in a sustained DROWNING in financial liquidity.
Why doesn’t the oil industry get that it exists for sole purpose to provide a place for Fed sponsored over liquidity to go? Because no one running the Fed could care less in the slightest amount about the actual economy or if oil is produced or not produced or widgets or hula hoops. They just need all the Fed financial “liquidity” to be able to go somewhere. Because when it does, someone who is rich is made rich and Wall Street is happy and everything is ok. The economy or oil production or anything else does not matter. Not one single bit.
Isn’t the whole point and nothing but the point in Fed World?
The purpose of the US economy is to support the large banks. We are all
suffering from this requirement . Removing Jackson from the $20, instead
of Hamilton from the $10, is looking more and more like a symbolic screw
you to the average American.
‘Why doesn’t the oil industry get that it exists for SOLE purpose to provide a place for Fed sponsored over liquidity to go?’
Oh for Crissakes, have you purchased gas or bought a product delivered by a gas or diesel vehicle?
If so then the ‘sole’ purpose of the industry is logically NOT to just to humor the Fed,it is at least in part to supply YOU with stuff.
While you are pounding away on that keyboard, using computer power that would have cost a million twenty years ago, now yours for five hundred bucks, do you credit the economy with ANY credit for that bargain?
It’s amazing to see the animals roaming in town. They’re out there roaming the streets and highways where I live- deer, bears, coyoats, lynx.
The skies have cleared over New Delhi, Beijing, Mexico City. . . . it’s just amazing
Omgsh. My cousin just posted a picture of the skies overlooking Köln on fb. Not a brown cloud in sight. The world truly is ending. :-p
ending? it’s just getting started.
optimism. it’s what’s for breakfast.
On the financial news yesterday I saw a lady saying the increasing pollution over China was a good sign that life is getting better. What a world we live in.
Kasadour (and others)
The animals are re-claiming Yosemite Valley!
Gotta be nice for them!
Kind of makes you hope that’s the way of all the rest of the “national and state parks”!
Go Bears!
GO BEARS!!
China is buying the surplus crude at these cheap prices and sending tankers directly to SA!
At the same time 50 Millions of crude in tankers on it’s way to USA! Frackers have to continue to keep pumping, pay some one to take theor crude! or shut off which has a significant cost .
Surplus of Oil is NOT going to stop until there is stoppage of 30M perday of global supply or demand increasing, very likely!
I have bought a few speculative short term puts and long term calls as hedges on the ETF – USO. Btw. they have changed the strategies, diversify into oil related other products to cut down the volatility and may NOT be direct play on the WTI, any more!
demand increasing, very (meant) UNLIKELY!
Only 1% of contracts are physically settled.
Right there is the evidence that we have become a nation of paper pushers and gamblers.
I won’t be surprised if one day the whole stock market will go the way of the oil price…because of liquidity and other unforeseen events. When that happens, I hope people will finally hold accountable the great enabler of this disaster, the Fed.
is the other 99% just taxation without representation on the oil consumer?
are there no transaction tax on the paper pushers?
And the moral of the story is: greed makes people stupid.
People do stupid things if you let them. Markets used to blow up every couple of years, and not just financial markets. It used to be a lot worse, before FDR’s reforms in the 1930s. Regulations changed all that. That’s why they were introduced.
It’s why engines have flywheels. You have to limit their motion and control their energy so they don’t tear themselves apart. Limits are important. Railings keep people from falling off cliffs. Ovens have thermocouples to keep them from burning down the house. And so forth.
The global petroleum industry appears to lack thermocouples and railings. Plenty of greedy people though, each of which is convinced they’re smarter than everybody else.
You don’t actually need a pandemic to blow up the economy, but it helps. Neither does a pandemic necessarily mean the economy will blow up. But one has to be prepared for it. It is the height of stupidity to be unprepared for a pandemic because they happen all the time.
Why do I feel like I’m talking to the wall here?
Some people need chaos, it gets them where they want to go. It’s fine when they are the ones impacted, but for some reason there is an inertia in the people who want to stop the chaos. I understand no one likes to put themselves in a position to be retaliated against, but the problem is that often they are not backed up. No one knows you any more when you speak up.
It’s not that you are talking to the wall, Unamused, it’s just that when a person steps out of line, so to speak, they had better have made plans for the backlash. This is a whole other way of living.
The problem is that a lot of greedy people can get obscenely rich on that longwinded road to perdition. Most of them assume they’re smart and nimble enough to jump off the train just before it reaches the edge of the cliff. Take the build-up in global debt for example. That seems to remain sustainable a lot longer than I had imagined possible. It has even gotten to a point where I am starting to think: hey, maybe the modern financial gurus are right and I’m just a conservative caveman, maybe the sky is the limit when it comes to debt loads, maybe the US and the EU member states can cope with debts which are multiples of the current debt load. In 2008 I really thought we had reached the end of the road. Now, in this mess of 2020, I’m not so sure anymore. And while back then I was warning everybody I knew about how they should prepare for the disaster that was to come, slowly turning into the village idiot with that crazy look in his eyes, I am now only sharing my discomfort and fears with my wife. And crazy as it may sound, I’ve discretely reinstated the large chicken coop in my backyard.
Spot on Unamused. A unique feature of this virus is the crap will be flowing farther uphill than usual due to the greed and lack of regulation. I like to think of the virus as the Great Reckoning™. When the large numbers of Mr. and Mrs. Nouveau Poor find themselves outside the gates of the club they mistakenly thought they were part of, much gnashing of teeth will occur.
The old poor or the working three jobs folks? Same shit different day. The delusional I got mine bootstrap-er crowd should not get comfortable. Poor doesn’t equal stupid. Everyone knows where the food and loot lives.
A dollop of empathy, even with our hugely lopsided playing field, would have been cheaper in the long run.
Incredible creation you have here Wolf. Thanks for having it.
Tragedy of the commons, the economy being the commons.
I think more than just a little fraud was involved in this paper oil market.
Greed can make people stupid. It can also make them dishonest. It can make people do really bad things.
Greedy people rule the world, and they can be very unreasonable. And they are frequently lethal to large numbers of people. Some people are pathologically greedy, compulsively dishonest, do really bad things, and were sharp as a bowling ball to begin with. You might like to think twice about sharing the same continent with them.
Unamused:
Sadly, I have no choice but to compete with them!
Needless to say, it is very stressful.
This precisely illustrates the problem, I think. A game of limbo, where whoever can set the bar lowest wins.
Unamused:
The greedy, the selfish, the self-focused……etc…..will always be part of the human race. It’s the “human condition”; part of the, “seven deadly sins” of humanity. The trick is to have a society that subtly curbs those traits but not too much.
Humanity requires that we have something “above” and “beyond” just “existing”…..requires that extra incentive to be “productive” and not be just “slugs”. Capitalism provides the “whip” (incentive) for most. Not for all.
I’m a capitalist……with deep reservations.
All those traits are incorporated into “parlor games” such as “Monopoly”.
Real life is really a game.
But, like the parlor games there must be rules of play.
Those traits that have negative societal effects playing the game such as greed, dishonesty, slight of hand, and others have had the upper hand for decades now. The rules, “regulations” have been decimated all in the genuflection to “free markets”.
And we see the results, even otherwise of the Corona Virus.
It’s all a power game now. But, it can’t go on forever. The ebb and flow of history and the tolerance of humanity to be subjected to any particular kind of serfdom will always rise to the surface and the blood flows.
We only “go around once” on this merry-go-round. There are no exceptions.
Once this “shut-down” is over many, many people all over the world will be re-thinking their lives under a materialistic world. Many will change how they wish to live their short lives. They may decide that the materialistic world is not for them.
Capitalism without “customers” is no capitalism at all.
The commons has no idea how much power they have; shut down the consumer world and lots of the corruption we endure by the flows of capital and that of politicians may wither on the vine.
Maybe.
This site has given many an opportunity to share their controversial opinions/knowledge without to much negativity.
That’s what is sorely lacking in our everyday world today.
Open, dialectic discussion on how to change the world for the better.
Stay safe and healthy out there.
Not to mention the “so called Au/Ag/Pt markets”, eh?…
Paper is just that – paper…suitable to start a fire with…
Oil WILL burn by itself…
P/M’s will “shine” by themselves….
cant they just call the guy that finds all the unexpected draws/builds?
and for crying out loud get the sand out of the skate park.
As Saudi reportedly have a whole lot of tankers with oil under way to the US and if the Saudis manage to transfer that oil to storage ashore, it implies that the Saudis are going to blow up US oilmarkets simply by ensuring that US producers run out of storage space. Risky, but with deep enough pockets, it would cause havoc in the US. Maybe the Saudis will succed this time in giving US production a fatal blow.
Realist: yesterday evening I checked the situation of the first two Saudi-flagged Capemax tankers who arrived in front of Houston earlier this week.
The Jana was still riding at anchor with no changes, while the Awtad has left her anchorage station and is slowly circling (“doing a loop”) the Gulf of Mexico. I’ve just checked the situation again and it hasn’t changed. Jana is still riding at anchor and Awtad is still circling through the Gulf at a steady 11 knots.
The latter means the ship captain is waiting for orders to arrive from the shipowners (Bahri, the State-owned Saudi shipping company) at any minute.
It’s much possible the Awtad will be ordered to another destination, but which one is impossible to say. China, Korea and Taiwan are all possibilities, as is Canada (large storage capacity). Aramco also has an agreement with the Japanese government to use the new strategic storage facilities in Okinawa but at this point everything goes.
US is still the biggest oil producer in the market now. US is not cutting back much (according to EIG figure as of the latest)but Saudis and Russia has agreed to cut back on Apr 12(if remembered correctly). So who’s there to blame with oil going negative?
OPEC+ is not yet cutting either. But we are not talking of them, but of the US. In fact, there seems to be still storage space in the US and even some tankers are being rerouted there because of that spare capacity. Until at least this week, the inventories in the US were still lower than 2017 peak! So it is pure speculation that hits the US oil industry the hardest. The real question should be who is behind this.
That said, the US oil industry should have started to cut in a big way a while ago. It is the only thing they can do right now to preserve cash.
What the world needs to go forward is certainly not the massive capital destruction in such areas as renewables, shale, oil sands and ethanol. That capital can be put to much better use to foster the global growth.
Just an on-the-ground observation. I saw yesterday that it was March 17th when I last gassed up my truck. I did so yesterday,but I only needed half a tank. When I compare that to the pre-Covid days when I gassed up every 4 or 5 days, I can see what a pickle we are in. Things are likely to get worse in the oil market!
Meanwhile my contacts in the Philippines inform me that due to the lockdown people are unable to earn money – and the government is distributing a pittance of rice to families — and many people are now hungry.
Yet the government has extend the lockdown to Cebu and other islands – and Manila will remain locked until May 15 at least.
This will end badly.
I am slightly amused to read that people are discussing strategies of how to make money off of this.
Good luck if you do
Ya saw a bit on V last nite about Bangladesh. The main export and source of income is apparel manufacture. Hundreds of thousands of workers are now out of work and there is no safety net.
We are all at rungs on the ladder. When the whole ladder drops a few rungs, it’s a nuisance unless you just had your head above water. Then it’s worse.
So the producers of the oil buy it back at -$40, which is a lot more profitable than pumping it out of the ground
Gas is still overpriced for $20 oil, let alone $10
Oil is cheap enough now that electric car manufacturers could add a gas tank and should use gasoline to power the batteries that drive the cars. Maybe a windmill on the roof as well just in case gas goes higher.
I love all the focus on current rather than long term conditions. When current earnings are bad, you do a forward projection to the moon. When current earnings are good, you do a forward projection to a galaxy far, far away. It seems pretty clear that this virus will lead to a long-term reduction in travel. I love travel but now I wouldn’t get on a plane, train or boat if you paid me. Any of you going to go in some hotel, rental car, or Airbnb while this virus is still out there? There is long-term overcapacity in oil production, and propping up oil production with subsidies, jawboning, low interest rates, or whatever else governments come up with, will just make the situation worse in the long run.
I am paying close attention to this process as it may apply to S&P futures. Stocks trade in the market for only a short time each day. Delivery is not a moot point. If there are no buyers for those stocks (pension funds, hedge funds = storage) then the futures could respond negatively. To the extent oil is not a consumable, (there is no market) it behaves like a stock. Without people working money does not go into retirement funds. Before this event the US monetary base was shrinking. The Fed intervention literally hockey-sticked MB levels back to the highs, while fundamentals were deteriorating before the crisis. Money velocity never benefited post 2009, now it is probably zero. They call it the “greater fool” theory when you sell a stock at the highs, what they call it when no one wants your paper at the bottom?
Bloody nubs.
So, now I’m curious, if I look at that chart Wolf has put up, it seems like there were at least several thousand contracts (likely more) that settled during the time this oil future went negative. Meaning the poor seller had to pay the buyer money to take the contracts off their hands.
Now, there are two questions:
1. Somebody lost big, but I’m curious to understand who was the actual winner here. After all, somebody had “buy” those contracts off the people who were so desperate to offload in negative territory.
2. In spite of all the contracts changing hands, I figure there was probably some real oil that needed to be delivered. After all, there were contract holders on expiration, and presumably they won big by taking delivery and getting paid to do so, so, what actually happened to that oil? Was it someone who had leases on the storage facility that just sat on it and made money off of those contracts, or did the storage then go for really high prices.
Would be entertaining to follow the real chain of events beyond what happened to the financial markets.
Your two questions are really one. The big winner was whoever has those last 25 million bbl storage leased at Cushing, almost certainly the pipeline operators.
I’m not sure the exact time frame, but there’s a 3-4 week window where the contract holder has to take delivery and I don’t think this window opens until May 1.
Bet there’s people getting creative right now.
That would be hilarious, the pipeline operators are the ones who are manipulating the markets.
Hey, how many tanker trucks can store 1000 barrels of oil?
Four.
Where is “Heck”? Did you mean “went to hell” but thought our ears were too dainty and we would faint if we read it? Reminds me of similar thoughts Bill Clinton had when he concluded the public would never elect a candidate who inhaled.
Why does the USA not buy oil for the strategic reserve at low prices since they are already saying they are doing everything it takes at least from the FED but the administration I mean Trump could do that.
There is suspicion that a foreign government Russian or Saudi was messing with the futures market so this would be payback time.?
Because it seems too smart. I find the logic of not topping off the SPR utterly inscrutable. Unless someone think oil prices were going lower.
Hopefully, someone will still do that… plenty of Saudi tankers to unload into the SPR.
I wonder…Did Exxon sell contracts then was paid to take them back? How many tankers have they rented? Someone made a crapload of money on this trade…an insider.