Why the fuck did we not buy oil when it was around 0?

I am just a student so maybe I am wrong, but I think the price hit 0 because contracts were expiring and the place that usually stores the oil were at full capacity so it meant that you would have to have the oil delivered to you and you would pay for the delivery + maintenance costs. I remember back then when I tried to invest, it wasn't as simple as it is investing in a stock and leaving it be.

The oil contracts which were negatively expired were expiring the following day and due for delivery a month later. Anyone holding a contract on expiration would've received thousands of barrels requiring very high industrial maintenance (and oil is highly toxic). Fancy that in your garden?

I know next to nothing about commodities / futures, but will spout off an answer anyway. The beauty of the internet... When you say oil was at zero, this was just the front month futures contract (I think it was May in this case). I think the June contract was around $20 or so. Spot oil was never negative. I think the only way you could have bought oil around zero or negative was if you took physical settle of a may contract and stored 1000 barrels of oil in your back yard (after picking it up in cushing, oklahoma) until prices went back up. 

I see, so let me get this straight:
1 contract of Crude oil was at negative say -30$ and you wanted to buy. 
1 contract contains 1000 barrels, so you would have received 30 dollars to take delivery and store 1000 barrels.
Then say you bought in April, you waited until now and want to sell. How would you even sell this and if prices were -30 when you bought this 1 contract how much would you even profit if you sold at say $60? If we say you only need to pay for transport and storage was free. 

I read this article about this one firm that bought 250,000 barrels, very interesting. https://markets.businessinsider.com/commodities/news/negative-oil-price…


 

Because it was strictly related to that month's delivery. The following months's deliveries did not present the same issue/opportunity. 

 I bought 1 contract of crude, 1 of soybeans, and 1 of copper during the peak of covid. I had to sell my crude and soybean contracts because of work but made like 8k on crude,10k on soybeans, and almost 38k on copper. Over doubled my savings. I will say you have to roll your contract and couldn't do it at 0 since it was expiring, but I think the idea that commodities were going to rally was pretty apparent to me. 

Delete delete Delete delete Delete delete Delete delete delete Delete delete Delete delete Delete delete Delete delete delete

The reason you didn't do it is the same reason that people who typically trade those contracts professionally didn't do it... you need a place to store it. Even if you have the space, you can't just put a bunch of barrels in the pack of a pickup and leave them in the yard, unless you want the EPA on your ass. If any seeped into the groundwater (and it would), you're responsible for it

Think you can time the market and get out of the contract before you have to take delivery? Nope, that's why people were paying money to get these contracts off their hands rather than take possession of toxic chemicals

not zero...negative -40   crude traded negative 40 dollars

if only you had 4 tanker trucks to take delivery in Cushing OK

Storage.

Not only is there a cost to hiring people/equipment to do it for you, doing it yourself could kill you. 

Here's a really good story from Bloomberg's Tracy Alloway about making the play with a jar of crude:

https://www.bloomberg.com/news/articles/2015-11-03/that-time-i-tried-to…

What if I told you I did?

Also, contracts expire, so you'd have to buy a forward contract. For example, the April 2021 contract was ~$30 when the price was $0. This $30 of contango eats into your profit, but it still would have been a $30 gain.