Not to sound cavalier, but there have admittedly been occasions over the past month where we cannot help but draw comparisons to a bad episode of The Twilight Zone, and this week’s action in the energy markets might be something Alfred Hitchcock would appreciate. For the first time in history oil prices traded negative on the Chicago Mercantile Exchange, as coronavirus has devastated global oil demand and the world is now awash in oil, with the major storage facilities for crude oil quickly approaching maximum capacity. As a result, Western Texas Intermediate (WTI) crude oil fell more than 100% on Monday to settle at negative $37.63 a barrel. To perhaps put this in better context, if you somehow had capacity to store 1,000 barrels or 42,000 gallons of WTI crude oil, the “seller” would conceptually pay you over $37,000 to take that oil off their hands! Oil prices have since risen back above zero to around $17 a barrel, but these are very strange times indeed. To add to the paradox, energy stocks were UP almost 2% for the week!
Have a safe weekend!
Coming up next week:
- S&P/Case-Shiller Home Price Index
- Consumer Confidence
- Q1 GDP (preliminary reading)
- Pending Home Sales
- FOMC Minutes
- Personal Consumption Expenditures
- Initial Jobless Claims
- Chicago PMI
- Market PMI Manufacturing
- ISM Manufacturing
Ian Browning | Director, Investment Strategies & Shareholder
Peter E. Simmons | President and CEO