Crude oil at $2.30 / barrel
04-20-2020, 06:46 PM
#41
Gets Weekends Off
Joined APC: Mar 2013
Position: C-172
Posts: 463
Originally Posted by ScarebusPusher
Oil ETF, in this case a light, sweet ETF. USO does a decent job of tracking the WTI prices. Be aware that they’re based on futures contracts, and as such, there is a cost to USO each month which compounds into your results.
Still, buy and forget, and any material gain in oil prices will generate profit for you. Also, be aware that this $-37.00 nonsense is purely due to the mechanics of the futures market - those that hold the paper as of tomorrow need to take delivery of the physical; and there’s nowhere to put it. That’s why it’s a great giveaway.
Your daughter’s lemonade stand is all ready to go. Stock, cups, ice, signage, it’s business. Then it turns out that the weird bald guy who lives at number 12 is actually on witness protection, but he went awry and decided to start hacking people up again and put them in his chest freezer. The street is a crime scene. Ice T and Detective Benson show up and cordon the street off with yellow tape. Helicopters hover over.
Sadly, as your daughter’s office hours draw to a close, the lemonade on your daughter’s stand is about to go off, she’s put as much as she can fit into empty bottles in the fridge for preservation, but it will cost her environmental fees to get rid of the leftovers. Cheaper to pay to have it taken off her hands.
tomorrow, however, is a new day..
The June futures are just above $20 - a more realistic indicator of WTI. Still, I’ve no doubt when all this settles down, and we know how much demand there will be, the oil nations will manipulate the price back up.
Still, buy and forget, and any material gain in oil prices will generate profit for you. Also, be aware that this $-37.00 nonsense is purely due to the mechanics of the futures market - those that hold the paper as of tomorrow need to take delivery of the physical; and there’s nowhere to put it. That’s why it’s a great giveaway.
Your daughter’s lemonade stand is all ready to go. Stock, cups, ice, signage, it’s business. Then it turns out that the weird bald guy who lives at number 12 is actually on witness protection, but he went awry and decided to start hacking people up again and put them in his chest freezer. The street is a crime scene. Ice T and Detective Benson show up and cordon the street off with yellow tape. Helicopters hover over.
Sadly, as your daughter’s office hours draw to a close, the lemonade on your daughter’s stand is about to go off, she’s put as much as she can fit into empty bottles in the fridge for preservation, but it will cost her environmental fees to get rid of the leftovers. Cheaper to pay to have it taken off her hands.
tomorrow, however, is a new day..
The June futures are just above $20 - a more realistic indicator of WTI. Still, I’ve no doubt when all this settles down, and we know how much demand there will be, the oil nations will manipulate the price back up.
04-21-2020, 02:54 PM
#44
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,160
Originally Posted by ScarebusPusher
The glut is temporary. The cartel will manipulate supply when there is a clearer estimation of demand.
Oil is behind just about everything. It always wins over the long term.
Oil is behind just about everything. It always wins over the long term.
Meanwhile, the US Strategic Petroleum Reserve only has room for another 75 million barrels.
Every day, the glut gets worse because producers aren't shutting down production fast enough. I don't see an end to the glut of oil for the foreseeable future. At this point, the US, OPEC, and Russia could shut down all oil production and there'd still be excess oil produced.
By the way, June's WTI contract closed below $12 per barrel today. The collapse in oil prices continues.
04-21-2020, 03:38 PM
#46
Line Holder
Joined APC: Jan 2019
Posts: 28
I do realise, thank you. 50 million barrels on the armada sounds like a lot. It’s half a day’s global consumption (in a non Covid world).
The surplus can easily be manipulated down when the dust settles. Whether that happens quickly is down to the games OPEC play. Do they want a return to profitability, or do they want to kill the US oil industry.
OPEC control the supply. There is a lag - demand fell quickly and supply takes time to control downward, but OPEC still control it.
The surplus can easily be manipulated down when the dust settles. Whether that happens quickly is down to the games OPEC play. Do they want a return to profitability, or do they want to kill the US oil industry.
OPEC control the supply. There is a lag - demand fell quickly and supply takes time to control downward, but OPEC still control it.
04-21-2020, 10:33 PM
#48
Line Holder
Joined APC: Jan 2019
Posts: 28
Originally Posted by senecacaptain
It looks like around $11 a barrel is the price. Still "wow"
Big oil didn’t know that the world would immediately stop consuming oil overnight, or they wouldn’t have sucked it out of the ground in the first place. As such, there’s a big glut. That’s driving the price.
OPEC will decide when the time to manipulate oil back up is. It could be that they’re enjoying throwing the US shale industry off a cliff for a while - but once they’ve beaten that to death, they’ll simply reduce supply to match demand - like they always have, and like all businesses do.
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