Oil Market Makes a Quick and Unexpected Turnaround
With the oil market bottoming out just a few weeks ago, now the tables have turned around for the better and quicker than anyone expected.
According to the Midland Reporter-Telegram, just a few weeks ago oil became something you had to pay people to take after closing with a negative price, but now prices are up 70% in some parts of the country.
April 20, 2020 was the day that oil closed at a negative price for the first time in history and during that day prices fell as low as $-40.32 a barrel stunning veteran brokers all the way to retail investors.
Two main things have happened to cause the turnaround:
First, the massive amounts of unwanted crude has ended and Saudi Arabia and Russia's price war has ended and Saudi Arabia has stopped flooding the market.
Second, U.S. shale companies have shut down wells that were deemed unprofitable.
That means for now, normal service has returned to the oil industry even though crude prices are hovering around the mid $30's.