Hey everybody Rob Maower here and today we are primarily talking about oil prices which have gone negative in the US for the first time in history

and then we also have a couple other stories for Tesla as well.

Tesla stock on the day today was down an even 1% to 746.36 cents which compared to the NASDAQ also down 1%.

All right, so I think the oil price news is the biggest news for the economy and business world today.

And this does have some impact on Tesla of course and it's kind of confusing not

necessarily intuitive so I wanted to walk through exactly what's going on here as I'm

sure a lot of people have seen the headlines about oil going negative so first

off let's actually talk about what went negative. These

are oil future contracts that went negative and specifically the contracts that went negative

in value were the contracts for oil to be delivered in May.

Generally this works out fine because people that are purchasing contracts to have oil delivered

generally want to eventually have oil delivered.

The problem right now is that demand for oil is way

down because of the coronavirus situation and it has been exacerbated by the price cuts from

Saudi Arabia and Russia over the last few months. Normally a price cut would increase demand you have more

potential uses for that oil when it is a lower price. But of course that logic doesn't apply when

the market is already in an oversupplied situation. Bringing that back to the contracts then, if you are in an oversupplied situation and you just don't physically have any room to take in more barrels of oil, even though you had a contract that said that you would purchase those, you're going to look to sell that contract off to somebody else that wants to take those barrels instead.

Normally that's fine, but if nobody else has space that's going to be available specifically in that time frame, which in this case is May,

then you're not going to be able to sell that

contract off handling and storing oil is difficult because it is a toxic chemical so there

are costs associated with that obviously a random person on the street can't just take delivery of 1,000 barrels of oil and store them in their apartment.

So there's a finite number of potential buyers that can actually handle that, especially when we're talking on the scale of oil where we're talking tens of millions of

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