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Started By
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re: May WTI Crude just fell to -$35.20
Posted on 4/20/20 at 6:13 pm to southdowns84
Posted on 4/20/20 at 6:13 pm to southdowns84
quote:Of course commodities are not the same as equities. But nonsensical trading of them in ETFs is. Whether driven by panicked nerds or an algorithm, they serve the same purpose,
This is exactly why commodities are not the same as equities.
0
Posted on 4/20/20 at 6:14 pm to dreigh
quote:
What prices were operators selling at? Truly curious, I'm just trying to get a better sense of how this all works.
It all has to do with USO and how they roll futures contracts.
A few desperate seller and no buyers.
Posted on 4/20/20 at 6:16 pm to NC_Tigah
Glad we shut down the economy to save some great grandmas.
Posted on 4/20/20 at 6:17 pm to Bear Is Dead
quote:
I see it often in grains.
Oh for sure. What grains ya involved with? I do some corn and beans but would really prefer not to right now lol
Posted on 4/20/20 at 6:25 pm to jcaz
quote:If it were just that simple.
Just stop production until May 1st. Stop the bleeding.
Posted on 4/20/20 at 6:42 pm to cajuncarguy
quote:
All storage is getting full. No where to go. Texas Gov Abbott is about to order all production to stop. Why give away their assets?
I was horrified as a kid when told about my family and other farmers dumping peaches when the price got to low. I didn't understand, but I do now. Oil production is going to have to be paused.
BTW, any way to increase the strategic oil storage? Use some nukes to make underground caverns. Really piss off the left. :-)
Posted on 4/20/20 at 7:43 pm to ClampClampington
Rice
Posted on 4/20/20 at 7:45 pm to dreigh
quote:There's so many, it's hard to say. I will revise my remarks and agree with the earlier poster - certainly at least some did - although unlikely to have been at -$38.
What prices were operators selling at? Truly curious, I'm just trying to get a better sense of how this all works.
The remarkable thing to me is: what is expected to change in 30 days? We know we have the storage issue. We know we have the virus issue. Why is June trading over $20?!?
Imagine on February 1st I had told you that right now my phone would say that oil was up $38 on the day and then had you guess the price.
Posted on 4/20/20 at 8:21 pm to Big Scrub TX
quote:
Why is June trading over $20?!?
If I had to guess, production is expected to halt dramatically. Some storage will open between now and then, and the economy is expected to open more going forward to increase demand.
This post was edited on 4/20/20 at 8:49 pm
Posted on 4/20/20 at 8:48 pm to Tridentds
quote:
Has to do with storage. If there is nowhere to store it then there is no way to unload it off of barges, ships, etc...
For example a panamax can hold 60,000 DWT so roughtly 450,000 barrels of oil. If the ship arrives and there is no where to offload it then the ship becomes the holding tank. Cost is probably $30,000 to $45,000 per day for a Panamax. This day rate does not stop until that ship is unloaded.
In 90 days you are talking $3M to $4M in day rates for the ship. This is why oil is trading so low. Crude is on ships, barges, and in pipelines all over the world. There is just no place to offload. Guarantee you there will be ships sitting with crude in them for 5-6 months or longer. This is how you end up with negative prices.
I know there's not much decorum on this site, so I want to thank you for your very informative response.
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