f6john
Member
Posts: 9382
Christ first and always
Richmond, Kentucky
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« on: April 20, 2020, 01:16:36 PM » |
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Oil was “selling” at -$37.63 a barrel. How can that be? Are we in real trouble now? Russia and Saudi Arabia are sparing over production cuts. I guess if you had a place to store it you could buy a super tanker load and they would have to pay you millions for taking it off their hands???
We have really screwed the pooch.
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Jess from VA
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« Reply #1 on: April 20, 2020, 01:23:54 PM » |
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Does this mean in a week, we can actually get paid to fill up at the gas station? That would be awesome.  |
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The emperor has no clothes
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« Reply #2 on: April 20, 2020, 01:56:43 PM » |
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I thought the Russians and Saudis came to an agreement the other day ?
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Wizzard
Member
Posts: 4043
Bald River Falls
Valparaiso IN
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« Reply #3 on: April 20, 2020, 02:09:57 PM » |
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I thought the Russians and Saudis came to an agreement the other day ?
They did,, but the reserves are full, market is way down on consumption and they have overproduced with no more storage. |
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F6Dave
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« Reply #4 on: April 20, 2020, 02:16:45 PM » |
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To get the money you'd probably need to 'buy' May futures today at the negative price, haul it from Cushing Oklahoma to your own storage for X months and then sell it.
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old2soon
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« Reply #5 on: April 20, 2020, 02:18:29 PM » |
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Does this mean in a week, we can actually get paid to fill up at the gas station? That would be awesome. Uh Jess yer fergiiten to rekemember! TAXES!! Free the back of my front.  RIDE SAFE. |
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Today is the tommorow you worried about yesterday. If at first you don't succeed screw it-save it for nite check. 1964 1968 U S Navy. Two cruises off Nam.
VRCCDS0240 2012 GL1800 Gold Wing Motor Trike conversion
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98valk
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« Reply #6 on: April 20, 2020, 03:57:22 PM » |
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it was just a contract that expired. new contract starts tuesday, should be back at $15-20.
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1998 Std/Tourer, 2007 DR200SE, 1981 CB900C 10speed
1973 Duster 340 4-speed rare A/C, 2001 F250 4x4 7.3L, 6sp
"Our Constitution was made only for a Moral and Religious people. It is wholly inadequate to the goverment of any other."
John Adams 10/11/1798
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RP#62
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« Reply #7 on: April 20, 2020, 05:02:59 PM » |
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To get the money you'd probably need to 'buy' May futures today at the negative price, haul it from Cushing Oklahoma to your own storage for X months and then sell it.
I was thinking I'd "buy" a million barrels. Have them send me my 37 million dollars, then donate the oil to the national oil reserve. Hope they will drop ship. -RP |
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cookiedough
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« Reply #8 on: April 20, 2020, 05:03:24 PM » |
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I do not see how it can be negative, but what do I know?
am sure it will only last a few more weeks or so into May but gotta love filling up for 99 cents a gallon although not going anywhere much?
I sure hope state parks as they are in some states will open back up either this week or for sure next weekend in WI but doubt they will. I might sneak into the local state park witch scanoe to go fishing since no one goes to that park much, unless it is road blocked in with barricades getting into it? NO DNR staffs it ever and only seen a ranger there about 2-3 times the past 20 years or so is probably one of the smallest and less used state park in WI
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Ken aka Oil Burner
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« Reply #9 on: April 20, 2020, 05:26:27 PM » |
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It's my fault. I had my oil tank filled yesterday at $1.39 a gallon.
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Big Rig
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« Reply #10 on: April 20, 2020, 05:33:48 PM » |
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Partially my fault...changed the oil on the Valk yesterday...  . |
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3fan4life
Member
Posts: 6958
Any day that you ride is a good day!
Moneta, VA
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« Reply #11 on: April 20, 2020, 06:29:45 PM » |
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1 Corinthians 1:18  |
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F6Dave
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« Reply #12 on: April 20, 2020, 06:56:01 PM » |
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This explains it pretty well. It will be painful, but the marketplace will be forced to re-balance very quickly. From Goldman Sachs...
A historic day in the oil market as the May WTI contract closed at -$37.6/bbl, the first negative settle ever, after posting the largest one-day sell-off ever of $55.9/bbl. While this move is symptomatic of an unprecedented oil surplus testing storage capacity, such a dramatic one-day price collapse owes entirely to the binding constraints of trading commodity futures into expiration.
Negative oil prices mean that producers are effectively willing to pay someone to move their crude. While this is already happening in Texas and Canada, today's WTI move reflects the fact that holders of May contracts were effectively willing to pay someone to get them out of their long positions before expiration tomorrow to avoid being physically delivered crude oil next month, when storage capacity will have run out.
Such a price dynamic could play out again tomorrow, the last trading day of the May contract. After that, the physical reality of a still massively oversupplied oil market will likely exert downward pressure on the June WTI contract (currently still trading at +$21/bbl). But with ultimately a finite amount of storage left to fill, production will soon need to fall sizeably to bring the market into balance, finally setting the stage for higher prices once demand gradually recovers. This inflection will play out in a matter of weeks, not months, with the market likely forced to balance before June.
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