WTF Oil?

[The beef 675] [I'm an image] “I’ve started getting used to saying ‘I’ve never seen something like this.’” - Jeff Hey there carnivores, Markets were down on Monday. And today we’re talking why oil dragged them down. Keep raging, Jeff & Jason [Image] [I'm an image] Stop being negative Last month: "Oil prices are so low, but this too shall pass..." Monday: "Hold my beer." Yesterday an oil futures contract [that expires today]( made history by dropping over 100% and falling below zero dollars. Let that sink in. The oil benchmark West Texas Intermediate (WTI)’s futures contract for May delivery closed yesterday at negative $37.63. This has never happened before. For context, it wrapped up Friday at $18.27 per barrel. Is that bad? It is if you’re an [oilman](. The economy is at a stand still and oil markets are facing a collapse in demand. Nobody is driving, flying, or doing anything that involves gasoline... although lighter use rose dramatically yesterday, as expected. The drop in demand at the pump and for jet fuel means refiners are producing less. In turn, upstream oil drillers have nowhere to sell their liquid gold and the storage facilities (think of it as the shed out back) are near capacity. In short, nobody wants the oil because there’s no place to put it. And there’s no place to put it because nobody wants it. And there was plenty of collateral damage. Oil’s decrease brought stonks down with it. The Dow fell over 2.4%, while the S&P and Nasdaq fell 1.79% and 1.03%, respectively. Mr. Brightside Further dated contracts indicate that [it’s not all bad](. June’s contract, which fell 18%, is still above $20 per barrel at $20.43. July’s contract, having fallen roughly 11%, is standing at $26.18. So why are other futures contracts fairing so much better? Mostly because delivery takes place further in the, for lack of a better word, future. May contract holders are mostly refiners and airlines which, at one point, actually wanted to take delivery of the fossil fuel. But with demand low and reserves full they are literally paying people to take it off their hands... The bottom line... While the future seems about as bright as Exxon Valdez crude covering one of those cute AF ducklings, there is reason to be optimistic. You, for one, can probably fill up the RAV4 with spare change. And if you’re an oil trader and can grit your teeth in the short term then you may stand to make a pretty penny. In 1990, facing [contango]( as well, Salomon Brothers' (RIP in peace) oil trading arm [loaded up tankers]( with crude just prior to Iraq invading Kuwait, which resulted in crude prices surging and a $100M payday for its trading architect Andy Hall. [Image] What If You Could Get Trader Like Returns From An Investment Portfolio? [I'm an image]( It’s Not Only Possible But Tonight At 8 PM ET You’ll Learn How [Reserve Your Seat]( [I'm an image] ☑️Prepare for impact. Yesterday we got our first look at an airline’s Q1 financials, as United Airlines was chosen as tribute for the industry. And it went about as well as you’d expect (think: Boeing 737 Max flying over the Bermuda Triangle in thick fog). United [announced]( a preliminary loss of $2.1B for the first quarter which dragged down the entire sector during trading. For comparison, United's Q4 profit was $641M. The good news? Well, technically there is no good news, but the airline is hoping it will receive $4.5B in government loans as well as $5B in federal payroll grants and loans. Oh, and jet fuel is at an all time low. ☑️The Virgin walk. Speaking of airlines in dire straits … Sir Richard Branson’s brainchild, Virgin Airlines, is in a world of trouble. And the UK-based branch is [seeking a loan]( from the British government that he totalllly plans to pay back according to a letter to employees. This comes a month after the British government gave easyJet a £600M loan. How serious is Branson about saving his company? He’s willing to put up his private island, Necker Island, as collateral. Dick has already announced an eight-week unpaid leave for employees of the down on its luck airline. ☑️Domino Effect. After failing to make an interest payment last week, Neiman Marcus is [getting ready to file for bankruptcy]( protection as early as Wednesday. The retailer is figuring out what to do as it is looking to sell or close some of its 43 department stores until after the coronavirus pandemic… whenever that is supposed to be. Neiman was planning to restructure its $4.7B of debt just as the pandemic began, and it closed down its stores in March. Neiman could be the first of many retailers to go through bankruptcy this year, as J.C. Penney missed a debt payment last week as well. Wait, they’re still in business? ☑️Going soft. Newly appointed IBM CEO Arvind Krishna’s first earnings call could have gone a little better. Ok, so he didn’t go all Papa John, but Krishna announced that IBM returned to its old ways as revenue growth sank in the first quarter thanks to coronavirus. Turns out, [even software sales are susceptible to the pandemic](. Krishna’s presence was the first time IBM’s CEO had been on an earnings call since 2014. Despite the times, Krishna announced his intentions to keep growing IBM through acquisitions. It’s probably a good time to bargain hunt, tbh. IBM’s share price dropped 3.3% after hours on the news. RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 Neither Raging Bull nor RagingBull.com, LLC (publisher of Raging Bull) is registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. 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