5 ms·
This is an interesting example of what happens when the supply and demand curve goes into the extreme ends of the chart: The price of "selling" your product goe
by Aurornis 10mo ago
This is an interesting example of what happens when the supply and demand curve goes into the extreme ends of the chart: The price of "selling" your product goes negative. It costs money to get rid of it.
Negative prices occur from time to time in the electricity market because some types of power plants are slow to ramp up and down. So if demand falls too rapidly, spot electricity prices can negative.
- strongpigeon 10mo agoOil briefly went negative a couple years ago too which was shocking. I thought about “buying” some, but then realized I’d have to set up for the oil to be picked up (or try to sell the contract before it expired).
- zahlman 10mo ago> a couple years ago It was near the beginning of the pandemic, due to the demand shock of everything shutting down. There were probably practical ways to profit off the low prices (assuming the risk of them not recovering), but I never did figure out something that would work for a retail investor.
- buckle8017 10mo agoThe only way to profit was too have a large storage tank.
- deleted 10mo ago[deleted]
- nemomarx 10mo agodid it not come with the barrels? I figured you'd just need a warehouse and a truck. (which is a pretty big ask, of course, and maybe free labor to pick it up up and move it into the truck...(
- deleted 10mo ago[deleted]
- meindnoch 10mo agoLol, no. When you buy "barrels" of oil on a commodity market, the barrel is a unit of volume (42 US gallons).
- SAI_Peregrinus 10mo agoBarrels are over $50 each even in bulk. The oil is often less than the barrel, "1 barrel" of oil is a unit of volume equal to 42 US gallons. The price/barrel is the price of bulk oil, not oil literally transported in barrels.
- jbm 10mo agoWhen I worked at a Coke bottler in Japan, we had similar issues with product. Stuff that didn't sell was called "Flush Out" and had to be disposed of. You couldn't legally just dump the contents without paying money so I made an app that let employees get cases for shipping costs. It was popular, even though we were usually talking about weird flavours that no one liked (stuff akin to Apple Ginger ale) They eventually got rid of it, but I was already out of the company so I didn't know the reason.
- aqme28 10mo agoSometimes employee benefits like that have weird tax obligations that the company would rather not deal with.
- einsteinx2 10mo ago> It was popular, even though we were usually talking about weird flavours that no one liked (stuff akin to Apple Ginger ale) I know this is beside the point, but Apple Ginger Ale sounds legitimately awesome. I’ve never seen that flavor before, but now I really want to try it haha.
- jbm 10mo agoI remember liking it too; it was actually a Schweppes product but as my boss said, it was straight to flush out. The Japan market just doesn't like sweet drinks. The top drink was green tea, which probably caused consternation as it was so expensive to manufacture. In retrospect I miss the teas from Japan more than any of the weird flavours we had. Thankfully one can make them oneself but there is something special about going to a corner store and having relatively healthy options instead of a hundred flavours of sugar water.
- zahlman 10mo ago> The price of "selling" your product goes negative. It costs money to get rid of it. But there also has to be a cost (or other liability) to keeping it, or you could just wait for demand to arise. (There generally is some kind of inventory/warehousing cost. But just saying.)
- lm28469 10mo agoI've recently seen potatoes for 26ct a kilo in a supermarket and wondered how people made money on that, farming, transportation, supermarket margin, &c.