Oil is trading close to $1.00 per barrel

[bobroars]

The May contract that expires tomorrow. No place to store it, the price could go negative. Who could have imagined this?

 

[psuro]

Buy low sell high.

 

[sluggo72]

Buy low sell high.

who you selling it to?

 

[The Spin Meister]

Will be back in the mid twenties by Wed.

 

[BobPSU92]

I’m stocking up hoarding.

 

[Chris92]

who you selling it to?

Introducing Bath & Body Works new Texas Tea hand lotion.

 

[whart]

Lowest price per barrel in almost 28 years. The problem is that there is little demand due to the pandemic with auto use way down etc. Being that many thousands of U.S. workers depend on the relatively high paying jobs supporting the energy sector....look for increased financial support from the government. Several large oil/gas providers stand very close to financial disaster if this continues. Not saying that the govt is always the answer....but....way too much is on the line to not assist these businesses IMO.

 

[psuro]

who you selling it to?

I got people.

 

[bobroars]

Will be back in the mid twenties by Wed.

That's about where the June contract is now. But, if we have no storage in May, will there be space by June? The May contract dropped 95% today

 

[bdgan]

who you selling it to?

Nobody today

 

[bobroars]

Almost down to a dime per barrel

 

[SLUPSU]

Just hit $0.10

 

[Nitt1300]

It's an ill wind that blows no one good

 

[Nittany Security]

Just hit $0.10

I love the free market...now about gas prices

 

[bobroars]

I love the free market...now about gas prices

Unfortunately they haven't budged

 

[PS4814]

Lowest price per barrel in almost 28 years. The problem is that there is little demand due to the pandemic with auto use way down etc. Being that many thousands of U.S. workers depend on the relatively high paying jobs supporting the energy sector....look for increased financial support from the government. Several large oil/gas providers stand very close to financial disaster if this continues. Not saying that the govt is always the answer....but....way too much is on the line to not assist these businesses IMO.

Socializing losses and privatizing profits - ain't capitalism grand what with its free markets and such?

 

[SLUPSU]

Now a penny a barrel!

 

[Waste Management Consultant]

Drain the swimming pool.

 

[sluggo72]

what is the June contract?

 

[SLUPSU]

what is the June contract?

21.85

 

[bobroars]

what is the June contract?

About $22

 

[bobroars]

The price is now minus $1.43

 

[interrobang]

Shut down the biggest consumer of oil, the airlines, throw in countries not allowed to drive anywhere, and this happens.

 

[SLUPSU]

Now negative 1.43

 

[Nittany Security]

The pressure must be tremendous in Washington to get the economy going again. I think we'll open up in May and live with the consequences. Might not be popular but damn a penny a barrel

 

[MJG-90]

Okay, please explain to us less enlightened in this area -- what does it mean when oil is trading at a negative? What exactly are we buying and selling? Is this a case where someone has more oil than they can store, so they are paying someone to take it off their hands? Or what is going on here? Thanks in advance for the explanation.

 

[91Joe95]

Okay, please explain to us less enlightened in this area -- what does it mean when oil is trading at a negative? What exactly are we buying and selling? Is this a case where someone has more oil than they can store, so they are paying someone to take it off their hands? Or what is going on here? Thanks in advance for the explanation.

Now the oil producers have to pay someone to store it. They can shut down wells, but they still have costs to pay, and that may be less than shutting down and having to restart later.

 

[whart]

Socializing losses and privatizing profits - ain't capitalism grand what with its free markets and such?

As I said....govt is not always the answer. But.....I actually see a very nice profit for the treasury whereby the govt potentially bails out the oil group with heavy strings attached . With the govt borrowing at essentially zero interest ...simply name your % Interest you expect back from the oil folks debt and there should be a nice upside for the people's treasury. etc. IMO.

 

[SLUPSU]

Now the oil producers have to pay someone to store it. They can shut down wells, but they still have costs to pay, and that may be less than shutting down and having to restart later.

So as the price continues to go further negative (-14.00), does that mean that there no actual transactions happening..... looking for a bottom?

 

[slykens]

Will be back in the mid twenties by Wed.

Not the May contract. Now is crunch time with the May contract closing tomorrow - time to put up or shut up and many people have no place to put it anymore so they're selling.

 

[slykens]

So as the price continues to go further negative (-14.00), does that mean that there no actual transactions happening..... looking for a bottom?

Presumably the transactions are happening at the reported price but as storage fills it could go to crazy negative numbers.

 

[The Spin Meister]

Okay, please explain to us less enlightened in this area -- what does it mean when oil is trading at a negative? What exactly are we buying and selling? Is this a case where someone has more oil than they can store, so they are paying someone to take it off their hands? Or what is going on here? Thanks in advance for the explanation.

Yes they are paying to get rid of it because they have no room to store it. All ships , pipelines, and tank farms are full. And if you suddenly shut down a well, it could 'lock up' and fail to produce in the future so they hate to do so.

So as the price continues to go further negative (-14.00), does that mean that there no actual transactions happening..... looking for a bottom?

Yes again. These prices are for May delivery contracts and no one wants any because there is no where to store it so no one is buying. The May contract periods expires tomorrow so you will see prices for June delivery listed on Wed. that will be in the mid 20s as they anticipate storage will open up as supplies get used. I am guessing they are also betting on the government easing restrictions and economic activity picks up. If the virus has a second wave, oil prices for June will drop below 20.

 

[The Spin Meister]

Not the May contract. Now is crunch time with the May contract closing tomorrow - time to put up or shut up and many people have no place to put it anymore so they're selling.

There will be no May contracts transacting on Wed. The posted price on news shows will be for June contracts.

 

[CattyGuy51]

Settles at -37.63

 

[Nittany Security]

Presumably the transactions are happening at the reported price but as storage fills it could go to crazy negative numbers.

We talked about how the industry was running out of storage capacity a couple of weeks ago here on BWI and I swear I was told it could never happened. Maybe I'm wrong.

 

[Woodpecker]

So will they pay me to fill my tank?

 

[The Spin Meister]

So will they pay me to fill my tank?

Keep dreamin' Sadly, the government is making more money on gasoline than the oil companies. Fed tax is what, 24 cents/gal? Pa tax is around 60 cents. So about half the price is just for state and federal taxes. Add in the local taxes like real estate, school, employee taxes, and more.

 

[demlion]

Will be back in the mid twenties by Wed.

where you gonna store it til then?

 

[demlion]

We talked about how the industry was running out of storage capacity a couple of weeks ago here on BWI and I swear I was told it could never happened. Maybe I'm wrong.

You'll have that, around here.

 

[republion]

What is the investment opportunity here if someone had cash sitting on the sidelines?