Oil prices are crashing, does that mean it’s a good time to buy stocks? Hold on, there’s a problem looming ahead. Answer the question, why are oil prices crashing? Because there is no place to store the oil, so oil producers must pay refiners to cough up some spare storage locations and become ever closer to 100% storage consumed. But by doing so, oil companies are loosing money. And if they keep loosing money through this means for too long, they will go bankrupt. Why can’t they just stop producing oil? Because for many oil rigs, if you shut it off, you’ll never get it back going again… not without the extreme labor required to set it up in the beginning.
So, therein lies the problem. If the deal is too good, and it destroys companies, there will be nothing left to invest in.
20200425/https://www.richdad.com/oil-prices-crash