Loading ...Spot Oil Goes to ZERO
The spot crude oil market has gone to zero. There is no place to store the oil with the lockdown causing a complete collapse in demand as people can no longer even drive to work. The rout in oil prices is throwing the decades-old currency pegs of the Gulf Arab region back under crisis watch. The collapse in oil prices to zero in the spot market has set in motion a crisis watch for the Middle East. This is a region that has been politically unstable, to begin with, and this only adds pressure to start wars to distract the people from the failing state governments whose income has just gone to zero. This no longer about a price war and OPEC. This is now a war of the Climate Change contingent against the rest of the world.
Even at the beginning of March, the twelve-month forward contracts on Saudi Arabia’s riyal jumped fourfold to 180 points in the offshore markets as the slide in crude prices began following the collapse of the OPEC+ production agreement. Now with spot prices at negative to zero, the political instability is rising rapidly.
The fears are rising that the prospect of declining dollar earnings for the Middle East and energy-exporting nations of the Gulf along with Russia and Venezuela, makes it more difficult for governments to even cope with social benefits no less balance their budgets. This puts extreme pressure on the financial systems around the world under which they keep their currencies pegged to the dollar.
Gold is declining as is the Euro are declining which is driven the people who think “cash is trash” and are convinced that the dollar has to crash with the stimulus. That very assumption means people will rush out and spend their cash when that is NO WAY humans will react during this phase where they are hoarding cash – precisely the opposite of their expectations.
This is a reflection that the dollar will be under even greater pressure and the shortage expands globally for the supply v demand is by no means confined to the border of the United States.