The price of futures contracts on US Crude Oil just went negative, yes negative!
For the first time ever, West Texas Crude Oil futures plunged to a negative value at -US$37 a barrel! This means that today, people are being paid to accept barrels of oil. This may seem absurd, but there are very good reasons. Due to the Covid-19 pandemic, global demand for oil has dropped by around 35%. Yet companies and countries worldwide, Saudi Arabia, Russia, USA, Canada and Iran are all pumping out pretty much the same amount of oil as they were before the pandemic. That oil has to be stored somewhere and all storage facilities are close to full. Everything from oil tanks to pipelines to rail cars to ships is at full capacity.
Oil companies have nowhere to store the oil, so they are literally being forced to pay to have that oil taken away.
At CareSaver, we have never liked the oil industry for several reasons. Firstly, excess oil consumption poses an existential threat to humanity through climate change. Secondly, but just as importantly, fossil fuels is a sector that has had terrible returns for the last 10 years, and will more than likely have equally terrible returns for the next 10 and 20 years.
At CareSaver, we are avoiding the energy sector turmoil, and we are the only fossil-free KiwiSaver fund. Not only are we doing good for the planet, but we are doing good for returns as well.
Join CareSaver today