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Well holy smoke is this ain’t no jokers i am about to say something i thought i would never say on this channel ever wti is trading at a two buck chuck yes a two buck chuck is when we call a stock that goes down to two dollars we call this two buck chuck stock okay wti crude oil is trading at two bucks now this is nothing okay this is nothing wait to see what happens
To crude oil as this video progresses okay because basically as it took me about an hour to to prep this video just wait to see what happens with crude prices as this video goes along okay let me be very clear okay i got starting the stock market was like 2008-2009 okay i start looking in the stocks i think i made my first investment and at 2008 started investing
More and more in 2009 sort of taken things super serious 2010 and so that’s what i got started in the financial markets the capital markets okay and let me be very very clear about this this is a most shocking thing i’ve ever seen in the financial markets and it’s not even close i have never seen something in my 11 or 12 years of doing this that is more shocking
Than what i am seeing right now it is absolutely the most shocking okay in this video i want to explain why this is so incredibly shocking i mean this is this is ridiculous i mean absolutely what’s going on with oil prices what’s going on with the oil price in general right now it’s just it’s just pure shocking like that’s all i can you know describe this okay and
I’m also gonna end this video explain if and how we can make money from this okay which is always important to know everybody let watch much you know they love to make money they’ll figure out how do we make money off this how can we capitalize this on the other side and things like that okay so we’ll get into all that in today’s video hope you guys enjoyed smash
The thumbs up button as always today is 4/20 2020 which means we need to hit 40 2001 he thumbs up on this video i can tell you if we hit that record that would be a record that might never be broken again okay that is what we’re going for smash that thumbs up button guys let’s get into this cake no just in that little amount of prep wti crude oil has now fallen
To a dollar fifty one oil price is just going through the for okay it’s already down to doored fifty-one i just prep a couple slides okay let’s go ahead and get into some of the shocking stuff i have seen since i got in the market in 2008 well obviously i got started when i got started in the markets in the financial markets it was a great recession ok that was
Kind of craziness i mean i was kind of you know shocking i mean the stock market fell peaked a trough over 50 percent pretty dang crazy ok 2010 the flash crash happened where essentially it was like four in half an hour period like for no really unexplained reason i don’t know if those systems or the computers or what but stock prices just fell through the floor i
Remember watching it live on cnbc at that time and it was just it was like nuts it was just absolute craziness like stock prices just went down and down and down and was down i think like 8 or 9 percent in a matter of like a half an hour’s time it was it was one of the craziest thing as i’ve ever seen the stock market was it was pretty ain’t she i remember i was
Watching the financial news channels the day tessa went public and this guy yili on must he took this company you know the public that was tesla and it was kind of like okay that’s gonna be another bankrupt company oh cute idea that’s pretty cool electric car company but you know ya know the car companies don’t make it you can try to upstart as many car companies
As you want they just don’t make it in the end and that little company tesla that was a nobody ended up becoming the second biggest market capitalization company in the entire world okay only behind toyota motor corporation in a matter of a decade that was pretty dang shocking to see somebody you know a company like that come from nowhere to just take on the
Auto industry in a major way not only make it but make it to a point where it like every auto company in the world is changing their whole strategy because of this one little company i came out nowhere that is pretty dang okay i watch the company name netflix go from this just like little ya’ll like like they send you with dvds in the mail and end up taking out
Blockbuster in hollywood video this little company takes down those retail giants to then they’re coming after all the satellite companies and the cable companies and a lot of people start thinking you know what i don’t need my cable anymore i don’t need my satellite i’m just gonna have netflix to now like all these massive major companies or want to have what
Netflix has you have companies like disney doing this apple google the biggest companies a world they want to the product netflix has that is unbelievable okay i’ve seen a lot of shocking stuff in this market including the row near owner once a hundred year event that’s going on right now incredible world economy shut down completely who would have ever thought
This okay world economies like like on real stuff okay but i’ve never seen something this shocking this takes a cake over all those other ones okay wti crude now is trading at ten cents the contracts for may now trading at ten cents down ninety nine point four five percent in one day my goodness guys wti crude was trading well you know there’s in terms of these
Contracts for the may contracts we’re trading over $60 we’re trading over $60 at the beginning of this year and and now they’re worthless completely completely and utterly worthless shocking okay never did i think i would see a chart that would make carnival cruise line charts ecl chart look like not that bad okay i didn’t think i’ve ever seen it i mean at least
Ccfl from like what fifty one dollars to twelve dollars here today which is pretty dang awful and pretty dang shocking but i would compare the wti chart i mean it’s just nothing okay oil prices are just a falling through the absolute floor and let’s be honest there’s no place for this oil to go right now that that’s very clear okay they’ve been talking about that
Last couple weeks and now it’s becoming very very evident because essentially what’s going on right now well the brownie brownie situations going on right world economies are shut down which means massively less amounts of oil is being used okay when massive amounts less of oil is being used but it’s still being produced at a very high rate you’ve got a store
Somewhere in basically just all the places to store oil is starting to run out okay i guess if you just want to start clear and land a store oil there or something like that which does really make much sense but yes if you want to do that you could but i mean right now it’s just absolutely craziness like like literally all the storage facilities are pretty much
Maxed out at this point they just have nowhere to put this stuff there’s your psyche just like look let’s just give it away okay and so that’s a really bad situation that just means supply-and-demand a warrior back in the situation but then you add on top of this okay this is another thing to be worried about if you’re thinking about economic recovery if you’re
Thinking about how long it takes us to come out of this and things like this okay us oil and gas industry distressed decade nearly seventy two billion dollars worth of us oil and gas speculative grade debt is distressed an amount that has doubled since a year began and is now at an all-time high as oil prices have collapsed now keep in mind this was written back
In march on march 19th when oil prices were somewhat normal and they weren’t trading at ten cents or what we’re gonna show here in a minute now trading negative in terms of contracts okay so imagine imagine the amount of distressed debt now okay this is this is a huge risk for all the banks out there it’s a huge risk for the entire energy sector not just in the
United states but around the world especially if you’re think about over the next you know several months and this is another thing that you just got to think about if we’re thinking about a really fast recovery in the economy and in terms of corporate earnings they’re just gonna bounce back super fast this is just another huge negative and another huge thing that
I think is a real thing that you got to pay attention to it and kind of worry about okay look at this guy’s i’m seeing something i never thought i see i never thought i see even oil under five dollars in terms of the contracts its trading negative negative 66 cents wti crude is trading at now for the may okay well i mean just my my goodness gracious this is this
Is beyond insane okay what i want to show you now is us oil rig counts okay so us oil rig counts have been declining massively as oil prices have dropped and dropped and dropped these numbers i don’t know if you’ll go to zero but it might end up going pretty dang close with how much more oil is dropping the june contracts continue to go down in a massive way june
Contracts i think right now are trading around 20 bucks and though that you know there’s a possibility that those ones could go down massively and end up going negative at some point in time so although it looks like oh they’re at 20 right now keep in mind that’s way down i mean june contracts for oil prices you would usually think that would be at least 60 bucks
If not you know more than that okay i mean we’re talking about summertime we’re talk about oil prices you know generally a good time for oil price in general and i mean at least 50 60 bucks you’d usually expect for june it’s trading in the 20s right now low 20s i’m not talking like right around 20 and who knows what will happen as a month goes on maybe a coast goes
Negative as well or goes down massively so when we’re talking about us oil rig counts this number could go very very close to zero it really could because this is no way in this type of oil environment any players in the shale or anything in general are going to be making any money and this isn’t just an issue for us this is an issue for canada there’s an issue
For countries around the world because these oil prices you know most these countries are losing money hand over fist and most these companies that are doing business either just doesn’t make financial sense for them to even keep these wells going they just have to close them this is have to close the rigs down just at the end of the day that’s just what they
Have to do this news just broke russia orders companies to cut oil production by 20% hey i mean a you know every single country around the world especially a lot of the ones that are dependent upon selling oil they’re trying to figure out how do we cut production how did we cut production because right now the story is supply and demand massively out of whack
For supply right people aren’t driving around right now people aren’t doing the normal stuff that goes on in a normal economy economic activity is down massively they’re talking about gdp is got to be down 30% maybe 40% next quarter the word that we’re in a situation right now and once in 100 years situation where supply and demand is so far out of whack it’s hard
To even explain because production is keeping up going yo even though they’ve cut and cut and cut production is still way higher than it should be let’s put it that way and so supply is through the roof and this is a little there’s so little demand for oil right now because of the economic situation where and everybody has cut and cut and cut all these companies
All these countries they’re all cut they just want to cut cut cut cut production cut production okay but where i think this could get interesting is when you see all these cuts is six to twelve months down the road and here’s where i think things could get interesting because as all these companies cut these companies go bankrupt as all these companies you know i
Have to shut wells and all these countries continue to cut production closed wells and hey and you know cut rigs and all those sorts of things okay as it continues to happen we could end up in a situation six to twelve months from now where supply is not nearly enough and demand is way too much for where supply is at well how could something like this happen well
Obviously the economies are gonna start to open back up and even if they don’t open back up fully what i’m expecting them not to open back up fully i you know i expect this to be a situation where the economic recovery takes several years to happen i don’t think everything just will work but we’re back to normal and everybody’s distract i don’t think that’s gonna
Happen but let me be very clear you know obviously once once we’re allowed to go out there and spend money again the the amount of demand out there for oil products is gonna go up substantially i mean in a ridiculous rate right while everybody’s been cutting or his companies have been going bankrupt and rigs have been getting cut and wells have been closing down
And all those sorts of things so you’re gonna end up having a situation where maybe you know six or twelve months down the road we could end up in a situation where just flat out there’s too much demand and there’s not enough supply which you know what happens then prices go up and up and up okay and in that scenario that gets pretty dang intriguing and we know that
The oil prices around here are unsustainably love like when we’re talking about negative oil prices or even even oil prices at $10 or $20 it’s just not it it’s not sustainable the reason being is that they’ll just end up getting in a situation where everybody will keep cutting keep cutting and then we’ll end up in a situation where prices will go up massively keep
In mind okay saudi arabia saudi arabia they get oil for cheaper far cheaper than anybody else okay if you’re in the united states and you’re trying to you know make a profit from oil you need oil well above $40 a barrel in saudi arabia they can make money on about 10 bucks somewhere around there roughly okay if oil prices are around 10 bucks they can make money
That’s amazing for them they’re the only ones that can do that the only ones ok in the middle east that’s the only place they can do that everywhere else you’re looking at $20 or not and most countries like we talked about 30 to 40 and up okay so what we know right now is oil prices right now are unsustainably low unsustainably low and that’s insane that’s crazy
But we know we know oil prices will rebound it’s just a matter of time it’s gonna it’s just a matter of time oil prices will rebound and so if we think about oil prices rebounding how can we make money from the rebound and this is what i spent a lot of time and attention for this weekend i’ve been spending so much time trying to focus on this it’s ridiculous okay
And so first off i don’t want to play any of the oil and gas players okay i don’t want to play any of the smaller players a lot of these public companies that have massive debt loads and are trading as like pretty much penny stocks now a lot of these you know players or you know the prices are like 50 cents a share and so i don’t want any of those guys because
I think most those guys are gonna go out of business it just doesn’t make sense to even keep those guys along and that debt loads it’s gonna end up getting nailed to the banks okay so imagine with some of these bank earnings are gonna be an investor losses as well is gonna be substantial but i also don’t want to play any of these big guys the vp’s the chevron’s
Exxon mobil’s shell i don’t really want to play any of those guys either they have lack of growth and a lot of those players aren’t just dependent upon oil prices a lot of them are also run refineries and things like that and a lot of those companies don’t have the best balance sheets as well and so i’m just looking at those big players and i’m like i don’t even
Honestly want to play those big players as of right now it doesn’t mean i’ll never invest in those companies but as of right now the way i look at it i’m just like no i don’t want the small players i don’t want the big players i don’t want anything like that right now okay so that doesn’t really interests me now look at this guys you ready to be shocked wti crude
Oil contracts from may are now trading at negative 26 dollars in 24 cents okay that’s down 243 percent here today who would ever thunk it negative crude oil prices this is this is beyond ridiculous okay so i guess another reason why stocks her in advance right you invest in apple stock and let’s say everything was to go wrong for apple stocks completely unrealistic
Let’s say the company went bankrupt the worst you can do is the stock goes to zero you lose 100% of your money geez louise i mean these these crude oil prices literally negative 200% lee you know let’s just retake you okay uso so uso united states oil fund so this was an interesting one that i was thinking about potentially playing and the reason is this is kind of
The this is the best pure play if you’re trying to correlate a product essentially to oil prices okay and this one’s pretty interesting but i talked about this with a lot of my group members in the main issue with this one is is what’s called contango okay and keep in mind i build big youtube channels in a big private group based upon my stock picks and me talking
About stocks not talking about commodity so i’m certainly no commodities expert so i’m trying to get caught up on this but basically this contango is a situation where you know a future oil prices are massively ahead of what is it going on in the past and so this forward dacian puts you in a situation where the upside is not what you really think it is okay so it’s
Not like you’re necessarily a stock price is low and you’re like this is on sustainably low stock price and so you buy into it in the stock price goes up it’s a it’s a much more confusing messy situation with buying something like us oh then it so then it kind of like meets the eye and so there’s really no pure way you can actually invest in you know profit off of
Essentially the spot price of crude oil uso is kind of somewhat close to that but it’s not because of the whole contango situation we talked about so it’s a real messy situation so i’m still looking for you know a way to play this because look at this guy’s wti crude is now trading negative thirty five dollars and 20 cents my goodness it’s down down almost 300%
Guys oh my gosh like this is absolutely like the craziest thing i’ve ever seen the financial markets and so once again i’ve been talking with a ton of people in my private stock group about this that actually know a lot more about commodities than i do once again i’m not a commodities investor this isn’t something i usually do all i know is oil prices you know
Where they’re at right now and where they’re likely to trade over the next month or two it’s an unsustainably low i believe over time oil prices will go up i believe that supply and demands gonna get way out of whack on the other side coming out of this and so you know i’m gonna keep talking with everybody and try to figure out a way to play this because i feel
Like there’s got to be there’s gotta be money to be made somewhere here i just know where it is and i’m gonna figure it out and when i figure it out i’m sure i’ll let you guys know so anyways i hope you guys enjoyed today’s video as always leave me a comment down there if you can find a great pure play on basically trying to bank on the fact that oil prices will
Likely rebound whether it be six months from now twelve months from now eighteen months from now or 24 months from now let me know in that comment section kind of what the play is or if you have something that maybe i haven’t looked at i would love to hear from you guys as always make sure to smash sums up button if you enjoyed this video this is nuts raising us
Thank you for watching and have a great day
Transcribed from video
Oil Price is BELOW $0! Oil Prices Go Negative! What Now? By Financial Education