yo!.. could get messy... innit!
LOCK DOWN, COCK UP, STOCK SHOCK
Michigan
residents should be angry at Donald Trump..
What's stopping people from
going back to work are..
swabs, reagents, test kits, gowns and masks..
The
governors don't want people staying home..
its costing people their
livelihoods..
and state tax revenue.
PALOOKAVILLE MASK SHORTAGE
VIX UP OIL DOWN
The
collapse in oil markets comes amid a generalized economic downturn,
with the coronavirus pandemic
plunging most of the world’s economies
into a downward spiral
many believe will be the deepest since
the Great
Depression of the 1930s.
Courtesy of IHSMarkit's energy vice president Roger Diwan
from zeropoint
How did you end up with negative oil prices today?
This happens when a physical futures contract finds..
no buyers close to or at expiry.
Let me explain what that means:
A physical contract such as the NYMEX WTI has a delivery point at Cushing, OK, &
date, in this occurrence May.
So people who hold the contract at the end of the trading window
have to take physical deliveryof the oil
they bought on the futures market.
This is very rare.
It means that in the last few days of the futures trading cycle,
(which is tomorrow for this one) speculative or paper futures positions
start rolling over to the next contract.
This is normally a pretty undramatic affair.
What is happening today is trades or speculators
who had bought the contract are
finding themselves unable to resell it,
and have no storage booked to get delivered
the crude in Cushing, OK, where the delivery is specified in the contract.
This means that all the storage in Cushing is booked,
and there is no price they can pay to store it,
or they are totally inexperienced in this game and are caught
holding a contract they did not understand the full physical aspect of
as the time clock expires.
A decline of over 15% in the June contract price points to real worries
that the physical stress will continue to reverberate,
and will force a lot more production shutdowns during May
than the ones announced so far.
So today negative prices are the reflection of dire market conditions for producers,
with the hope that demand restart before the middle of May and that the
June contract does not face the same fate.
West Texas Intermediate oil prices have gone negative in a
record low for the US benchmark, as the market continues to crater amid
the general economic collapse.
Vanishing demand and a
glut of supply have combined to heavily impact the US benchmark fuel,
with prices dropping from $18.27 to close at -$37.63 a barrel on
Monday – down over 300 percent from the previous day’s close. It's the
first time the crude oil futures contract has ever traded in the
negative since the New York Mercantile Exchange (NYMEX) started
trading it in 1983.
This is today, bad enough.
What about next week ? Next month ??
Anyone with any practical knowledge of the oil patch knows that this is going to get (literally) messy, very messy indeed...
I know how we got here.
Economic Growth is weak to collapsing
America is now an oil exporter
China is not a driver of oil consumption
I'm still not sure
about this price war between Saudi Arabia and Russia Some say they are
colluding against American shale producers. I can't see Saudi Arabia an
aly doing that. My view is Saudi Arabia was going after Russia and not
colluding with them. The Saudis and Russians never cooperate.
I don't see how high
cost shale and tar sand production is economically justified. High cost
sites will have to be capped if that's the right term. Long term cars
are moving to electric and the price of solar and wind keeps dropping.
Incidentally New York State just shut its last coal plant
Oh and Donald Trump said trade wars are easy to win.
And I do think Randolph and Mortimer Duke made a killing!
Where are the "Greenies"!!!??? Where are all the environmentalists....?????
Are we not now living
in the world they have long sought? Are we now not living in a world
where there's no demand for oil? Where there's no demand for production
and workers either.....And, the trees soaking it up.... We're seeing
huge reductions in CO2...
Shouldn't the Greenies' be cheering all this on? But, all we hear are crickets....
Traders
in these futures markets distort prices by buying oil
when they can't
take delivery of it..
and/or selling oil they don't have.
They never
expect the music to stop which is so foolish.
So now a bunch of hedge
funds/oil traders who bought futures..
HAVE TO PAY FOR THE OIL!
That's
right - they have to buy oil that they cannot store and cannot sell.
Futures contacts are real..
and if you can't roll them over into a new
contract..
then you have to legally pay up..
or go bankrupt.
This is why
the price is negative -
that's the hedge funds/oil traders begging
someone who is actually in the oil business
to take this oil off their
hands.
Good luck with that!
I'll bet there is literally no storage
space left.
The little that was there is already spoken for so.... oil
prices could go down from here.
All oil producers need to shut down
completely.
How fast can additional oil storage facilities be built?
Not fast enough.
In another alarming development, the Brent crude oil price has now plunged to an 18-year low.
Brent (sourced from the North Sea) is trading at just $19 per barrel,
down 25% today alone, following the slump in US crude oil prices below
zero last night.
West Texas Intermediate oil prices have gone negative in a
record low for the US benchmark, as the market continues to crater amid
the general economic collapse.
Vanishing demand and a
glut of supply have combined to heavily impact the US benchmark fuel,
with prices dropping from $18.27 to close at -$37.63 a barrel on
Monday – down over 300 percent from the previous day’s close. It's the
first time the crude oil futures contract has ever traded in the
negative since the New York Mercantile Exchange (NYMEX) started
trading it in 1983.
coming up..
oil to be stored in kings college chapel..
oil to be stored in kilner jars..
jam jars..
when is a door not a door..
when it's a jar..
the oil future's not what it used ta be..
Congratulations. I knew the record would stand until it was broken..
Take it with a grin of salt.
