US Oil (WTI Crude) is Cratering; less than $1 per barrel
quote:
Originally posted by jhe888:
quote:
Originally posted by radioman: Should we buy
There are some ETF's that track oil, and are just a few clicks away.
Where you going to put it? That is the problem. The potential buyers have no place to store it.
Might be a misunderstanding here. An ETF is an exchange traded fund. There is no physical oil for the ETF holder to store. It's all on paper. That is what I was proposing to "buy"
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April 20, 2020, 02:49 PM
jhe888
Well, but all prices will crash when the actual buyers can't take the oil.
The fish is mute, expressionless. The fish doesn't think because the fish knows everything.
April 20, 2020, 03:00 PM
83v45magna
quote:
Originally posted by Skins2881: lady puts gas in plastic Bag
So, like, every useful tanker trailer in the US (each of which holds 8000 gallons or 190 barrels), and every available Big Tank Along The Highway or whatever, they're all full? All of the train taker cars in America are full, every rail yard full of full trains, "no one" can store a bunch of better-than-free Crude?
As far as that goes, how expensive can it be to dig big ponds, line them with plastic shit, and fill them up? Texas and Oklahoma alone have gozillions of acres of empty, flat, land. Why aren't they dotted with Crude swimming pools? It comes out of the ground, after all... it can surely sit there, temporarily.
And what about actual Barrels? Why aren't places barreling that shit up at a breakneck rate, stacking them tall and deep? Why aren't there fields of barrels stacked tall as a building or whatever is possible? Someone has done the hard work. found it, drilled for it, and transported it. And we can't *store* it?
Originally posted by Skins2881: To answer my earlier question about if we had already filled the strategic reserves. Nope, blocked by Chuck Schumer. Congress needs to act immediately and buy up as much as we can store, and expand storage if possible. Buy cheap and stock it deep.
Looks like a deal has been made to fill up the SPR. Dated from April 14th:
quote:
WASHINGTON, D.C. - The U.S. Department of Energy (DOE) today announced it is negotiating contract awards with nine U.S. companies for the purpose of storing their U.S. produced crude oil in the Nation’s Strategic Petroleum Reserve (SPR).
Hit with the combined effects of COVID-related demand destruction and excess supply, the U.S. oil industry is faced with storage demand exceeding availability. Responding quickly to this emerging storage crunch, on April 2, 2020, DOE issued a Request for Proposals to use available storage capacity at the SPR for temporary storage.
“When producing oil you have two options – you either use it or you store it. With the impacts caused by the COVID-19 pandemic, we are seeing an enormous decrease in demand as our country works to contain the virus,” said U.S. Secretary of Energy Dan Brouillette. “This is why making storage capacity available in the SPR is so important. Providing our storage for these U.S. companies will help alleviate some of the stress on the American energy industry and its incredible workforce.”
The awards under negotiation are for approximately 23 million barrels of crude oil storage, which will be distributed into all four SPR sites. Most of these deliveries will be received in May and June 2020, with possible early deliveries in April. Awardees can schedule return of their oil through March 2021, minus a small amount of oil to cover the SPR’s cost of storage.
In combination, these nine companies will be storing oil aggregated from numerous small, medium, and large U.S. producers at the SPR.
"I’m not going to read Time Magazine, I’m not going to read Newsweek, I’m not going to read any of these magazines; I mean, because they have too much to lose by printing the truth"- Bob Dylan, 1965
April 20, 2020, 03:15 PM
rusbro
quote:
Originally posted by 46and2: So, like, every useful tanker trailer in the US (each of which holds 8000 gallons or 190 barrels), and every available Big Tank Along The Highway or whatever, they're all full? All of the train taker cars in America are full, every rail yard full of full trains, "no one" can store a bunch of better-than-free Crude?
As far as that goes, how expensive can it be to dig big ponds, line them with plastic shit, and fill them up? Texas and Oklahoma alone have gozillions of acres of empty, flat, land. Why aren't they dotted with Crude swimming pools? It comes out of the ground, after all... it can surely sit there, temporarily.
And what about actual Barrels? Why aren't places barreling that shit up at a breakneck rate, stacking them tall and deep? Why aren't there fields of barrels stacked tall as a building or whatever is possible? Someone has done the hard work. found it, drilled for it, and transported it. And we can't *store* it?
Or old mine shafts... ?
Seems so strange that this is the best we can do.
Maybe I'm wrong, but I'd expect there are very demanding regulations on where and how large quantities of oil can be stored.
April 20, 2020, 03:20 PM
stoic-one
quote:
Maybe I'm wrong, but I'd expect there are very demanding regulations on where and how large quantities of oil can be stored.
Yep, that stuff would be held hostage by environmental impact studies for YEARS.
I had seen that announcement previously. Not nearly as good as buying it cheap, but if it adds some relief to the market great. Still hope someone (see PDJT) rubs Schumers nose in his screw up.
Jesse
Sic Semper Tyrannis
April 20, 2020, 03:24 PM
radioman
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April 20, 2020, 03:25 PM
saigonsmuggler
quote:
Originally posted by Balzé Halzé: Not a stupid question at all. The thing is, no one is buying any oil right now. Still, the deadline for WTI futures contract is tomorrow. When the Brent Crude contract deadline nears, perhaps it will have a huge drop as well. As has been said, there simply isn't anywhere to put the oil, so no one is buying anything, but the contracts are still due tomorrow for WTI.
Wow.
I think Brent contracts are settled in cash whereas WTI contracts have to be settled physically - you have to take possession of the oil to close your position. Thus I don't think we'll see this in Brent.
However there's still hope - June, July and August contracts are sitting in decent postions. August contract was still up near $30 a barrel. Traders betting that economy and consumption will be back soon enough.
April 20, 2020, 03:31 PM
Balzé Halzé
quote:
Originally posted by saigonsmuggler:
I think Brent contracts are settled in cash whereas WTI contracts have to be settled physically - you have to take possession of the oil to close your position. Thus I don't think we'll see this in Brent.
However there's still hope - June, July and August contracts are sitting in decent postions. August contract was still up near $30 a barrel. Traders betting that economy and consumption will be back soon enough.
Thanks. That makes sense. Hopefully we will indeed see normality return in the coming summer months.
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Men will fight and die to protect women... because women protect everything else. ~Andrew Klavan
April 20, 2020, 03:34 PM
Oz_Shadow
Where can I buy some of that negative oil? They pay me for buying it right?
I just paid $0.88 per gallon at Costco, and given inflation, I think that was the cheapest in my entire lifetime. It may have been $0.70 but that was 30 years ago. With inflation, $0.88 would be about $0.47 back then.
April 20, 2020, 03:47 PM
ElToro
I bought some shares of the ETF USO this AM. We’ll see how we do in the winter when at least heating oil demand comes back. Nobody is driving, nobody is flying.
April 20, 2020, 03:48 PM
radioman
quote:
Originally posted by Oz_Shadow: Where can I buy some of that negative oil? They pay me for buying it right?
Seems there's money to be made by buying it and burning it to get rid of it Of course, getting rid of barrels of oil by burning it might have other non-desirable effects
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April 20, 2020, 03:49 PM
radioman
quote:
Originally posted by ElToro: I bought some shares of the ETF USO this AM. We’ll see how we do in the winter when at least heating oil demand comes back. Nobody is driving, nobody is flying.
that's what I'm talking about. You got it for like $4 and it was once over $100. Awesome that you actually did it.
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April 20, 2020, 04:18 PM
Russ59
quote:
Originally posted by 83v45magna:
Speaking of no place to put fuel....
Of the millions of YouTube video available, I instantly recognized that gas station as the Westchester Mart on the corner of West Manchester and Emerson, on the north side of LAX. I'm not surprised some Westside hipster was befuddled by the Tesla's lack of a fuel filler door. Uh, duh. That particular gas station is about $0.80-1.00 more per gallon. Drive east half a mile and there are two gas stations that are more reasonable followed by another small station that is consistently $1.00-1.50 more per gallon than average. There's a sucker born every minute.
I suspect CA will still be paying $1.00/gal above national average just because we're special.
P229
April 20, 2020, 04:33 PM
jhe888
quote:
Originally posted by rusbro:
quote:
Originally posted by 46and2: So, like, every useful tanker trailer in the US (each of which holds 8000 gallons or 190 barrels), and every available Big Tank Along The Highway or whatever, they're all full? All of the train taker cars in America are full, every rail yard full of full trains, "no one" can store a bunch of better-than-free Crude?
As far as that goes, how expensive can it be to dig big ponds, line them with plastic shit, and fill them up? Texas and Oklahoma alone have gozillions of acres of empty, flat, land. Why aren't they dotted with Crude swimming pools? It comes out of the ground, after all... it can surely sit there, temporarily.
And what about actual Barrels? Why aren't places barreling that shit up at a breakneck rate, stacking them tall and deep? Why aren't there fields of barrels stacked tall as a building or whatever is possible? Someone has done the hard work. found it, drilled for it, and transported it. And we can't *store* it?
Or old mine shafts... ?
Seems so strange that this is the best we can do.
Maybe I'm wrong, but I'd expect there are very demanding regulations on where and how large quantities of oil can be stored.
You are right, of course.
The fish is mute, expressionless. The fish doesn't think because the fish knows everything.
I couldn't help but giggle. My favorite was "She's gonna do it" between suppressed giggles.
April 20, 2020, 05:22 PM
2BobTanner
When did the “Twilight Zone” become reality? There has to be meme out there somewhere for what we are living now. This is an “alternate reality” and a dream, correct?
--------------------- DJT-45/47 MAGA !!!!!
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