eli5 What is WTI and why is it crashing
In: Economics
WTI stands for “West Texas Intermediate” – it’s a grade of crude oil.
It’s typically sold via delivery contracts and the last day to trade May delivery contracts was today.
There’s a problem though – literally every storage container on the planet is full because nobody is driving. If you had a May delivery contract to sell and nobody on Earth wants it you’re stuck in a bizarre oversupply market shock and basically offering to pay others to take the oil you can’t store.
That’s what happened today, oil speculators and producers had to *pay* refineries to take their oil because there’s so much oversupply.
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