The 2014-2016 oil crash caused dozens of oil and gas companies to file for bankruptcy and hundreds of thousands of layoffs. Traders will buy a contract months before delivery date, hoping the price goes up and they can sell at a profit to someone who does want to take delivery of the oil, without any intention to actually take delivery of the oil. And if you click here we’ll show you something that could be key to unlocking 5G’s full potential... BP’s market-cap has now fallen below £50bn. On Monday, they fell from $10 to –$0.43 in just two hours, down to a low of –$40.32, before rebounding to –$13 in late trading. Registered in England & Wales. As of Friday, May WTI contracts were still trading at $18.27 a barrel. All rights reserved. "The perils of playing a game of brinksmanship with Vladimir Putin were proven in dramatic fashion," Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in a Friday note to clients. What would I do with it? So desperate, in fact, that they will pay someone simply to take it off their hands. Until recently, these two companies were the two most profitable stocks on the FTSE 100. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee. However, the US shale industry emerged from that period stronger and the United States would eventually become the world's leading oil producer. Brent Brent crude tumbled by almost a … If you’re aiming to get your finances on track and you’re in or near retirement, then here’s your chance to claim a FREE copy of an exceptional investing report featuring 5 stocks that The Motley Fool UK is expressly recommending for INVESTORS aged 50 and OVER to consider investing in! For example, a commodities trader in London may have bought into WTI May futures at $60 a barrel at the start of January, expecting to sell for a healthy profit in April. As a result, the cost of storing oil – offshore or at oil depots – has soared. © 1998 – 2020 The Motley Fool. This suggests anyone who can hold onto oil for a while can make a tidy profit – as long as they have somewhere to keep it. They’re desperately trying to reinvent themselves as a result. Oil prices plunged after the dramatic breakdown of talks between OPEC and Russia prompted Saudi Arabia to launch a price war. But this month, it does matter. That figure alone suggests you should reset your sights on what these two companies can do for you. I’ve just sold the UK share and I think you should too. All times are ET. That’s a far cry from 2005, when they generated an astonishing one-third of profits. Although nobody at the forecourt is paying you to fill up your car, the wider drop in oil prices means petrol at the pump currently costs an average of 110.4p a litre, down from 126p at the start of the year, and the lowest since 2016. In early March, we anticipated the industry’s response would be rapid and decisive. Find out more, 'Rottweiler' fund manager in £1.1bn swoop for TalkTalk, BA’s last Boeing 747 jets fly into retirement, Economy at risk of stalling, Bank of England warns, Imperial Brands hires corporate troubleshooter to beat vaping funk. Any opinions expressed are the opinions of the author only. The irony is that falling oil revenues will deprive both companies of the revenues they need to fund the switch. New BP boss Bernard Looney started his tenure in February by calling for a rapid carbon transition to net zero. The oil price dipped below $30 the following January, but normal service appeared to be resumed as it headed above $80 over the next two or three years. Russia refused to go along with OPEC's proposal to rescue the coronavirus-battered oil market by further cutting production at a meeting in Vienna on Friday. Buying UK shares after market crashes is a better way to make millions, £5k to invest? The kingdom slashed its April official selling prices by $6 to $8, according to analysts, in a bid to retake market share and heap pressure on Russia. New York (CNN Business)Oil prices suffered an historic collapse Monday after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. Shell aims to cut its net carbon footprint by 65% by 2050, by switching to renewables, biofuels and hydrogen. About Us  |  Contact Us  |  Fool Careers | The Fool UK Team  |  Legal Information  |  Disclaimer & Disclosure  |  Privacy & Cookie Statement  | GDPR | Terms & Conditions  |  Site Map. The Financial Ombudsman Service and Financial Services Compensation Scheme may consider certain investment related claims. That said, for oil to trade at less than zero is a historic and astonishing moment, the first time this has happened. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit! If you require any personal advice or personal recommendation, please speak to an independent qualified financial adviser. Registered Office: 5 New Street Square, London EC4A 3TW. The oil price is sliding again, and BP (LSE: BP) and Royal Dutch Shell (LSE: RDSB) are watching their share prices slide with it. They aren’t the forces they were. Please review our, You need to be a subscriber to join the conversation. BP and Shell have been poor investments for years. The Motley Fool UK has no position in any of the shares mentioned. Even in a normal economic downturn, oil prices tend to fall – people have less money to spend, meaning fewer holidays, less manufacturing and less trade. Is now the time to boot them out of your portfolio for good? Use promo code FINECO-MF today and enjoy up to 50 free trades over your first two months! Buying and selling oil futures contracts is not like selling stocks and shares: futures are essentially the right to collect a certain amount of oil on a specified date. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Harvey Jones | Thursday, 24th September, 2020 | More on: BP RDSB. The Covid-19 pandemic, though, is catastrophic for oil prices. Brent crude, the grade used in the UK, Europe and two thirds of the world, was still trading at around $26 a barrel on Monday for deliveries next month – historically low, but not negative. The other problem is that a lot of people actually do trade oil futures like they do stocks and shares. Retirement savings: I’d buy cheap UK shares today to beat your State Pension worries, Stock market crash: I’d drip-feed £467 a month into cheap UK shares in an ISA to make a million, Warning! Specifically, you have to go and pick WTI up at a massive hub in Cushing, Oklahoma, known as the Pipeline Crossroads of the world. After Russia and Saudi Arabia failed to agree a deal in early March, countries agreed a historic deal last week, but many now believe this won’t be enough. No liability is accepted by the author, The Motley Fool Ltd or its Officers, or Richdale Brokers and Financial Services Ltd or its Officers, for any investment loss, or any other loss or detriment experienced by any individual for any investment decision, whether consequent to, or in any way related to this content, the provision of which is an unregulated activity. When the lockdown finally ends, energy prices should rebound but even then there seems to be a limit on how high they can go, thanks to Permian shale. Although there’s a chance supply could shrink as companies shift out of oil, pushing up the price. Why is the stock market soaring? That means when the contract expires, you actually have to go and pick the oil up. Morningstar: Copyright 2018 Morningstar, Inc. All Rights Reserved. The first thing to note about all of this is that there isn’t one universal oil price. June WTI (oil to be delivered a month later) is trading at $22 a barrel, suggesting traders believe this will all be resolved in a month’s time, even if demand will still be astonishingly low by historical standards. The Telegraph values your comments but kindly requests all posts are on topic, constructive and respectful. Factset: FactSet Research Systems Inc.2018. Oil price crash: why producers are paying to give it away Price of US crude oil falls below zero as lack of demand due to coronavirus lockdowns force traders to take drastic measures