Oil Price is BELOW $0! Oil Prices Go Negative! What Now?
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Oil prices today went negative! WTI otherwise known as West Texas Intermediate oil price was literally negative. This is the most insane thing I have ever seen in the financial market. Much crazier than anything I have seen in the stock market before. Who would have ever thought they would see a day when oil contracts are literally negative?! Certainly not me. let’s talk about how we can make money if crude oil price bounces back the next year or 2. I want to also explain why oil prices have gone down so much. Enjoy!
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Well Holy smokes This ain’t no joke as I am about to say something I thought I would never say on this channel ever. wt AI is trading at a two buck Chuck yes a two buck Chuck is when we call a stock that goes down to $2 we call this two buck Chuck stock okay wt Ei crude oil is trading that two bucks now this is nothing Okay.
This is nothing wait to see what happens to crude oil as this video progresses okay is basically as it took me about an hour to to prep this video, just wait to see what happens with crude prices as this video goes along. Okay, let me be very clear.
Okay, I got started the stock market was like 2008 2009 Okay, I start looking into stocks. I think I made my first investment and to 2008 I started investing more and more in 2009 started taking things super serious 2010 so that’s when I got started in the financial markets, the capital markets.
Okay, and let me be very, very clear about this. This is the most shocking thing I’ve ever seen in the financial markets and it’s not even close. I have never seen something in my 11 or 12 years of doing this that is more shocking than what I am seeing right now.
It is absolutely the most shocking Okay, in this video I want to explain why this is so incredibly shocking. I mean, this is this is ridiculous. I mean, absolutely. What what’s going on with oil prices? What’s going on with the oil price in general right now?
It’s just it’s just pure shocking. Like that’s all I can you know, describe this, okay. And I’m also going to end this video explain if and how we can make money from this. Okay, which is always important to know everybody let watch much You know, they love to make money.
They love to figure out how do we make money off this? How can we capitalize this on the other side, and things like that. Okay, so we’ll get into all that in today’s video. Hope you guys enjoy smash that thumbs up button, as always today is for 22,020 which means we need to hit 42,020 thumbs up on the video.
I can tell you if we hit that record. That would be a record that might never be broken again. Okay, that is what we’re going for smash that thumbs up button. Guys. Let’s get into this cake. No, just in that little amount of prep WETA crude oil has now fallen to $1.51 oil price is just going through the four. Okay, it’s already down to $1.51.
I just prepped a couple slides. Okay, let’s go ahead and get into some of the shocking stuff I have seen since I got in the market in 2008. Well, obviously I got started when I got started in the markets in the financial markets. It was a great recession. Okay, that was kind of craziness.
I mean, I was kinda you know, shocking. I mean, the stock market fell peak to trough over 50% pretty dang crazy. Okay. 2010 the flash crash happened, where essentially it was like for an half an hour period. Like, for no really unexplained reason.
I don’t know if this is the systems or the computers or what, but stock prices just fell through the floor. I remember watching it live on CNBC at that time. And it was just it was like nuts. It was just absolute craziness. Like stock prices just went down and down and down. It was down I think like eight or 9% in a matter of like a half an hour’s time it was it was one of the craziest thing as I’ve ever seen the stock market it was it was pretty shocking.
Okay, I remember I was watching the financial news channels the day Tesla went public and this guy Ilan Musk, he took this company, you know, public that was Tesla and it was kind of like, okay, that’s gonna be another bankrupt company. Oh, cute idea.
That’s pretty cool electric car company. But you know, yeah, now the car companies don’t make it. They didn’t try to upstart as many car companies you want they just don’t make it in the end. And the little company Tesla that was a nobody ended up becoming the second biggest market capitalization company in the entire world.
Okay, only behind Toyota Motor Corporation in a matter of a decade. That was pretty dang shocking to see somebody you know a company like that come from nowhere to just take on the auto industry in a major way not only make it but make it to a point where like every auto company in the world is changing their whole strategy because of this one little company that came out of nowhere.
That is pretty dang shocking. Okay, I watched a company named Netflix go from this just like little you’re like like they send you DVDs in the mail and end up taking out blockbuster and Hollywood video this little company takes down those retail giants.
To then they’re coming after all the satellite companies and the cable companies and a lot of people start thinking you know what, I don’t need my cable anymore. I don’t need my satellite. I’m just going to have Netflix to now like all these massive major companies or want to have what Netflix has you have companies like Disney doing this apple Google the biggest companies a world they want to have the product Netflix has that is unbelievable.
Okay, I’ve seen a lot of shocking stuff in this market, including the Roni Rona once 100 year event that’s going on right now. Incredible world economy shut down completely. Who would have ever thought this okay world economies like like on real stuff, okay.
But I’ve never seen something this shocking. This takes a cake over all those other ones okay. They’ll be UTI crude now was trading at 10 cents for contracts from Maine. trading at 10 cents down 99.45% in one day. Oh my goodness, guys. wt crude was trading. Oh, you know, there’s in terms of these contracts for the main contracts, we’re trading over $60 we’re trading over $60 at the beginning of this year, and now they’re worthless.
Completely, completely and utterly worthless. Shocking. Okay. Never did I think I would see a chart that would make Carnival Cruise Line Chart CCL chart look like not that bad. Okay, I didn’t think I’ve ever seen I mean, at least CCL fell from like, what $51 to $12 here today, which is pretty dang awful and pretty dang shocking.
But I would compare the WETA chart, I mean, it’s just nothing. Okay, oil prices are just falling through the absolute floor. And let’s be honest, there’s no place for this oil to go right now that that’s very clear. Okay. They’ve been talking about that last couple weeks.
And now it’s becoming very, very evident. Because essentially, what what’s going on right now? Well, the ronnie Ronnie says situations going on right? world economies are shut down, which means massively less amounts of oil is being used, okay?
When massive amounts less of oil is being used, but it’s still being produced at a very high rate, you’ve got a store somewhere, and basically just all the places to store oil is starting to run out, okay, I guess if you just want to start clearing land a store oil barrel, or something like that, which doesn’t really make much sense.
But if you want to do that, you could but I mean, right now, it’s just absolute craziness, like, like, literally, all the storage facilities are pretty much maxed out at this point, they just have nowhere to put this stuff. There’s just like, just like, let’s just give it away. Okay.
And so that’s a really bad situation that that just means supply and demand are way out of whack in this situation. But then you add on top of this, okay, this is another thing to be worried about. If you’re thinking about economic recovery, if you’re thinking about how long it takes us to come out of this, and things like this, okay.
Us oil and gas industry distressed debt, okay, nearly $72 billion worth of us oil and gas speculative grade debt is distressed in a mount that has doubled since the year began, and is now at an all time high, as oil prices have collapsed.
Now keep in mind, this was written back in March on March 19, when oil prices were somewhat normal, and they weren’t trading at 10 cents, or what we’re going to show here in a minute now trading negative in terms of the contracts, okay? So imagine, imagine the amount of distressed debt now, okay, this is this is a huge risk for all the banks out there is a huge risk for the entire energy sector, not just in the United States, but around the world.
Especially if you’re thinking about over the next, you know, several months. And this is another thing that you just got to think about, if we’re thinking about a really fast recovering economy. And in terms of corporate earnings, they’re just going to bounce back super fast.
This is just another huge negative and another huge thing that I think is a real thing that you got to pay attention to it and kind of worry about, Okay, look at this guy’s I’m seeing something I never thought I see. I never thought I see even oil under $5. In terms of the contracts.
It’s trading negative, negative 66 cents. wt crude is trading at now for me, okay. Well, I mean, just my goodness gracious. This is this is beyond insane. Okay. What I want to show you now is us oil rig counts. Okay, so us oil rig counts have been declining massively, as oil prices have dropped and dropped and dropped these numbers.
I don’t know if it will go to zero, but it might end up going pretty dang close. With how much more oil is dropping the June Crump contracts continue to go down in a massive way. June contracts, I think right now are trading around 20 bucks.
And though, you know, there’s a possibility that those ones could go down massively and end up going negative at some point in time. So although it looks like oh, there are 20 right, Now, keep in mind, that’s way down. I mean, June, June contracts for oil prices, you usually think that would be at least 60 bucks. If not, you know, more than that.
Okay. I mean, we’re talking about summertime, we’re talking about oil prices, you know, generally a good time for oil prices in general. And I mean, at least 5060 bucks, you’d usually expect for June, it’s trading in the 20s. Right now, low 20s. I’m not talking like right around 20.
And who knows what will happen as a month goes on, maybe it goes goes negative as well or goes down massively. So when we’re talking about us oil rig counts, this number could go very, very close to zero, it really could, because this is no way in this type of oil environment. Any players in the shale or anything in general are going to be making any money.
And this isn’t just an issue for us. This is an issue for Canada is an issue for countries around the world because these oil prices, you know, most of these countries are losing money hand over fist and most these companies that are doing business that either it just doesn’t make financial sense for them to even keep these wells going.
They just have to close them. They have to close the brings down just at the end of the day. That’s just what they have to do. This news just broke Russia orders companies to cut oil production by 20% You know, every single country around the world, especially a lot of the ones that are dependent upon selling oil, they’re trying to figure out how do we cut production?
How do we cut production, because right now, the story is supply and demand massively out of whack for supply, right? People aren’t driving around right now people aren’t doing the normal stuff that goes on in the normal economy, economic activity is down massively, the talk about GDP is going to be down 30%, maybe 40%. next quarter that we’re in, we’re in a situation right now.
And once in 100 years situation where supply and demand is so far out of whack, it’s hard to even explain, because production is keeping up going. You know, even though they’ve cut and cut and cut, production is still way higher than it shouldn’t be, let’s put it that way.
And so supply is through the roof. And there’s just so little demand for oil right now, because of the economic situation where everybody has cotton, cotton, cotton, all these companies, all these countries, they’re all cut, they just want to cut, cut, cut, cut production, cut production, okay.
But where I think this could get interesting is when you see all these cuts, is six to 12 months down the road. And here’s where I think things could get interesting. Because as all these companies cut, as all these companies go bankrupt, as all these companies, you know, have to shut wells and all these countries continue to cut production, close wells, and, and you know, cut rigs and all those sorts of things.
Okay, as it continues to happen, we could end up in a situation six to 12 months from now, where supply is not nearly enough. And demand is way too much for where supply is that? Well, how could something like this happen? Well, obviously, the economies are going to start to open back up.
And even if they don’t open back up fully, which I’m expecting them not to open back up fully. I you know, I expect this to be a situation where the economic recovery takes several years to happen. I don’t think everything just won’t work. But we’re back to normal and everybody’s just dry.
I don’t think that’s going to happen. But let me be very clear. You know, obviously, once once we’re allowed to go out there and spend money again, the amount of demand out there for oil products is going to go up substantially. I mean, in a ridiculous rate, right?
While everybody’s been cutting, or these companies have been going bankrupt, and rigs have been getting hot, and wells have been closing down and all those sorts of things. So you’re going to end up having this situation where maybe, you know, six to 12 months down the road, we could end up in a situation where just flat out there’s too much demand and there’s not enough supply, which you know, what happens then prices go up and up and up. Okay.
And that’s scenario that gets pretty dang intriguing. And we know that the oil prices around here are unsustainably low. But when we’re talking about negative oil prices, or even even oil prices at $10, or $20, it’s just not it’s not sustainable. The reason being is that they’ll just end up getting in a situation where everybody will keep cutting, keep cutting, and then we’ll end up in a situation where oil prices will go up massively.
Keep in mind, okay, Saudi Arabia, Saudi Arabia, they get oil for cheaper, far cheaper than anybody else. Okay, if you’re in the United States, and you’re trying to, you know, make a profit from oil, you need an oil well above $40 a barrel. In Saudi Arabia, they can make money on about 10 bucks, somewhere around there, roughly.
Okay. If oil prices are around 10 bucks, they can make money. That’s amazing for them. They’re the only ones that can do that. The only ones Okay, in the Middle East. That’s the only place they can do that. everywhere else. You’re you’re looking at $20 enough.
And most countries like we talked about 30 to $40 and up Okay, so what we know right now is oil prices right now are unsustainably low, unsustainably low. And that’s insane. That’s crazy. But we know we know oil prices will rebound it’s just a matter of time.
It’s just a matter of time, oil prices will rebound. And so if we’re thinking about oil prices, rebounding, how can we make money from the rebound and this is what I spent a lot of time and attention for this weekend. I’ve been spending so much time trying to focus on this it’s ridiculous Okay, and so first off.
I don’t want to play any of the oil and gas players Okay, I don’t want to play any of the smaller players there are a lot of these public companies that have massive debt loads and are trading last like pretty much penny stocks. Now a lot of these you know, players are, you know, the prices are like 50 cents a share.
And so I don’t want any of those guys because I think most of those guys are gonna go out of business. It just doesn’t make sense to even keep those guys along in the in that debt loads to get end up getting nailed to the banks. Okay, so imagine what some of these bank earnings are going to be and then investor losses as well it’s going to be substantial.
But I also don’t want to play in these big guys the bps the Chevron’s Exxon Mobil’s shell, I don’t really want to play any of those guys either. They have lack of growth. And a lot of those players aren’t just dependent upon oil prices, a lot of them are also run refineries and things like that.
And a lot of those companies don’t have the best balance sheets as well. And so I’m just looking at those big players. And I’m like, I don’t even honestly want to play those big players as of right now, doesn’t mean I’ll never invest in those companies. But as of right now, the way I look at it, I’m just like, No, I don’t want the small players I don’t want the big players.
I don’t want anything like that right now. Okay, so that doesn’t really interest me. Now. Look at this guys. You ready? be shocked. wt I crude oil contracts for me are now trading at negative $26.24. Okay, that’s down 243% here today, who would ever thunk it negative crude oil prices? This is this is beyond ridiculous.
Okay is I guess another reason why these stocks are an advantage, right? You invest in Apple stock and let’s say everything was to go wrong for Apple stocks. It’s completely unrealistic. But let’s say the company went bankrupt, the worst you can do is the stock goes to zero if you lose 100% of your money.
Geez Louise, I mean, these these crude oil prices, literally negative 200%. You know, it’s just ridiculous. Okay. You so so uso United States oil funds. So this was an interesting one that I was thinking about potentially playing. And the reason is, this is kind of the this is the best pure play if you’re trying to correlate a product, essentially to oil prices. Okay.
And this one’s pretty interesting, but I talked about this with a lot of my group members. And the main issue with this one is what’s called contained Okay, and keep in mind, I build big YouTube channels, and a big private group based upon my stock picks me talking about stocks not talking about commodities.
So I’m certainly no commodities expert, so I’m trying to get caught up on all this. But basically, this contango is a situation where, you know, a future oil prices are massively ahead of what is going on in the past. And so this forward datian puts you in a situation where the upside is not what you really think it is, okay?
So it’s not like you’re necessarily a stock price is low, and you’re like this is unsustainably low stock price. And so you buy into the stock price goes up, it’s a much more confusing and messy situation with buying something like us, oh, then it’s then it kind of like meets the eye.
And so there’s really no pure way you can actually invest and you know, profit off of essentially the spot price of crude oil uso is kind of somewhat close to that, but it’s not because of the whole contango situation we talked about so it’s a real messy situation.
So I’m still looking for you know, a way to play this because look at this guys, W ti crude is now trading negative $35.20. My goodness, it’s down almost 300%. Guys, oh my gosh, they This is absolutely like the craziest thing I’ve ever seen in the financial markets.
And so once again, I’ve been talking with a ton of people in my private stock group about this that actually know a lot more about commodities. And I do once again, I’m not a commodities investor. This isn’t something I usually do. All I know is oil prices, you know where they’re at right now and where they’re likely to trade over the next month or two.
It’s an unsustainably low. I believe over time, oil prices will go up I believe that supply and demand is going to get way out of whack on the other side coming out of this and so you know, I’m gonna keep talking with everybody and try to figure out a way to play this because I feel like there’s gotta be there’s gotta be money to be made somewhere here. I just don’t know where it is.
And I’m gonna figure it out. And when I figure it out, I’m sure I’ll let you guys know. So anyways, I hope you guys enjoyed today’s video. As always, leave me a comment down there if you can find a great pure play on basically trying to bank on the fact that oil prices will likely rebound whether it be six months from now 12 months from now 18 months from now or 24 months from now.
Let me know in that comment section kind of what the play is or if you have something that maybe I haven’t looked at I would love to hear from you guys as always make sure smash thumbs up button if you enjoyed this video. This is nuts raising us then you for watching and have a great day.