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Started By
Message
re: May WTI Crude just fell to -$35.20
Posted on 4/20/20 at 3:01 pm to ClampClampington
Posted on 4/20/20 at 3:01 pm to ClampClampington
Is it possible to put a moratorium on demurrage costs?
1
Posted on 4/20/20 at 3:05 pm to NC_Tigah
Here's the real pricing from the major hubs:
That being said I'm hearing some strange shite on spot offers from midstream purchasers in the field.
That being said I'm hearing some strange shite on spot offers from midstream purchasers in the field.
Posted on 4/20/20 at 3:06 pm to back9Tiger
I doubt it, but I can't say for 100% because I have never experienced it. For the railroads, barges, vessels, they are not making any money from a producer parking their equipment. Demurrage rates reflect the opportunity cost of them not being able to use their equipment, it's a pretty lucrative part of the railroads business
Posted on 4/20/20 at 3:08 pm to NC_Tigah
quote:
At these prices, this is not a physical pblm with storage/transport.
It is a paper problem.
As Russian said, this is coming from panicked nerds sitting at their cubicle desk in a shirt and tie, sacred to death they'll get a call asking where they want the oil delivered.
If this were true there'd be some other nerd in a cubicle somewhere ready and willing to take advantage of the arbitrage opportunity.
This post was edited on 4/20/20 at 3:09 pm
Posted on 4/20/20 at 3:12 pm to southdowns84
quote:Not when the futures contract expires in a few minutes.
ready and willing to take advantage of the arbitrage opportunity.
Posted on 4/20/20 at 3:14 pm to ClampClampington
quote:
Most intermediaries buy cars or unit trains from the railroad or secondary market, that's where things will get sticky as most are already being used for rolling storage
The railroads do charge for storage of private cars. Curious how this all shakes out.
As far as shipping the contracts with the railroad generally have the private car charges (miles per car) built in as I understand. While coal hoppers are often owned by the utilities in captive service, oil tanks are generally owned by UTLX or GATX and are free running.
Posted on 4/20/20 at 3:15 pm to Major Dutch Schaefer
quote:
Time for the Dems to allow Trump to fill up all the oil reserves to the top.
They’ll fight him every inch of the way and then post some illogical headline that takes credit for an upswing when/if it ever happens
Posted on 4/20/20 at 3:16 pm to cwill
quote:
That being said I'm hearing some strange shite on spot offers from midstream purchasers in the field.
like?
Posted on 4/20/20 at 3:19 pm to ClampClampington
quote:
Demurrage rates reflect the opportunity cost of them not being able to use their equipment, it's a pretty lucrative part of the railroads business
That's the thing I am getting at here. Privately owned oil tanks, they are not owned by the railroad, generally do not pile up demurrage when sitting. They are paid by mileage.
There has to be some mechanism for the private car owners to collect however as I can't see them just letting cars sit at a receiver for an unlimited amount of time.
It's not uncommon to see things like privately owned plastic hoppers sitting on a siding for a couple weeks as it is slowly unloaded onto trucks as needed.
Posted on 4/20/20 at 3:20 pm to LSURussian
quote:
Not when the futures contract expires in a few minutes.
So then physical storage/transportation is a problem, which was my point.
Posted on 4/20/20 at 3:58 pm to BuckyCheese
I see what you saying. I've never worked for a company that owns private cars, but yeah that's exactly right. If I have a unit train bought from the railroad that I cannot get offloaded, I would obviously charge the consumer at least the dumurrage that the railroad was charging me as the buyer.
And I would expect payment as well if they were my own cars that were stuck because they could not be offloaded
And I would expect payment as well if they were my own cars that were stuck because they could not be offloaded
Posted on 4/20/20 at 4:07 pm to southdowns84
quote:As is the case with any panic selloff. Commodities, Equities, anything.
If this were true there'd be some other nerd in a cubicle somewhere ready and willing to take advantage of the arbitrage opportunity.
Either we suddenly found a boatload (pun intended) of storage at and after the close today, or this was a nerd panic.
Posted on 4/20/20 at 4:09 pm to cwill
quote:Any rumblings of a major player (whether hedge fund or actual operator) blowing out?
cwill
Who do you think made bank today on this? Vitol/Trafi/Arnold?
Posted on 4/20/20 at 4:11 pm to jcaz
It’s not nearly that simple. Shutting in Shale production in the Permian is nothing like shutting down deep water production in Green Canyon. And running out of crude storage isn’t the half of it, there’s few places left to squirrel away motor gasoline and aviation fuel. We should be loading up the Strategic Reserve right now, but our favorite California Crone blocked the Administration from doing just that.
Enemies of the People
Enemies of the People
This post was edited on 4/20/20 at 4:12 pm
Posted on 4/20/20 at 4:35 pm to Icansee4miles
quote:There were no dollars authorized. Mnuchin should buy May contracts until the total purchases equal zero $$$
We should be loading up the Strategic Reserve right now, but our favorite California Crone blocked the Administration from doing just that.
Posted on 4/20/20 at 4:44 pm to NC_Tigah
How is it possible to purchase something at -$35.20?
Posted on 4/20/20 at 4:54 pm to NC_Tigah
Not sure why oil companies aren’t donating it to the Federal Government. Don’t think it’s tax deductible but it’s better than paying someone to store it
Posted on 4/20/20 at 4:54 pm to NC_Tigah
quote:
Mnuchin should buy May contracts until the total purchases equal zero $$$
Or even better, as many of them where they have to pay SPI to take the oil to fill it full. Help the national debt as well.
This post was edited on 4/20/20 at 4:59 pm
Posted on 4/20/20 at 5:00 pm to Icansee4miles
quote:
Not sure why oil companies aren’t donating it to the Federal Government.
Good idea in theory, but this was driven by speculators that don't actually intend to possess the oil that they buy or deliver the oil they sell.
This post was edited on 4/20/20 at 5:05 pm
Posted on 4/20/20 at 5:05 pm to ClampClampington
Who can I contact if I have a few trailers I want to fill up?!
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