Holy shit! That's crazy! https://www.foxbusiness.com/markets/oil-price-crashes-record-low Oil crashes 94% to record low near $1 per barrel U.S. oil prices plummeted in historic fashion Monday, hitting their lowest level on record as traders unloaded positions ahead of the May contract's Tuesday expiration. West Texas Intermediate crude oil futures for May delivery cratered by as much as 94 percent to $1.03 a barrel. The selling had WTI on track to close at its lowest level since recordkeeping began in March 1983, according to Dow Jones Market Data. The June contract was trading lower by 12.15 percent at $21.99 a barrel. The May contract is a “horror show” and “heading into the worst delivery situation in history,” Phil Flynn, senior market analyst at Price Group Futures, told FOX Business. “With demand still dead and OPEC+ cuts not hitting fast enough, the market looks like it has no bottom." Demand for crude oil is projected to fall by 29 million barrels per day this month, according to the International Energy Administration, as COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease. Lower economic activity means weaker demand for crude oil and its byproducts, including gasoline and jet fuel. The sharp drop in demand has storage tanks in Cushing, Oklahoma, a key U.S. oil hub, filling up at an astounding rate. Inventories have ballooned by 48 percent to about 55 million barrels, according to a recent report from the Energy Information Administration. Capacity at the hub is about 76 million barrels, according to the EIA. Oil supplies were swelling even before Saudi Arabia launched a price war against Russia on March 8 after the latter refused to join OPEC in slashing production, causing oil prices to post their largest single-day drop on record. After more than a month of pumping out oil at elevated production levels, the world’s largest producers agreed on April 12 to historic cuts that will reduce output by 20 million barrels per day beginning May 1. However, the production deal still won’t be able to offset the big drop in demand. “To prevent inventories reaching capacity limits, lower prices are needed to trigger further production shut-ins in North and South America,” wrote the chief investment office of the global wealth management arm of Zurich-based investment bank UBS. WTI has lost 82 percent of its value this year.
The end game is clear. Government bailouts will allow oil companies to pump even with no buyers, the elimination of environmental regulations will allow the unwanted oil to be dumped in the nearest river. barfo
Definitely makes energy way more cheaper than green energy. The Electric Cars won't be able to compete either.
Can someone buy and pump back into a reserve? Prices have gone negative in areas so you get paid to take delivery of oil.
I got a 25 thousand gallon swimming pool. Can I get paid to fill it with oil then later when prices increase sell it all back?
Happens when travel is at a basic stand still. Cruise Ships, Air travel, Cars, less Energy consumers. I'm sure there are other sectors as well.
June futures are still trading over $20 a barrel. Those expire in a month. I can't imagine there will be a ton of demand in a month from now. Those prices will then drop again to close to $0. Seems like a great opportunity to short (sell) those $20 June contracts now then close (buy) for super cheap in a month and profit.
Seriously contemplating buying and burying a 1000-2500 gallon tank on my property if I can find the actual gas super cheap. i'm not a diesel guy(diesel has bulk sellers to private entities all over).
Maybe there is a good technical reason this cant be done, I just haven't heard it. I understand normally you would never do it as you have to pay to extract oil, pay to pump it back, then pay later to extract it. But if you are literally getting paid to take oil it seems like the economics could actually support some crazy plan such as this.
Tanks may be sold out or over priced. Gas lasts maybe 6 months unless you start adding stabilizers and such. Even with oil selling for $1 a barrel or negative I'm not sure how low gas can actually get as refinery is going to want something, then there are tons of taxes/distribution costs. Plus is gas going to be the same price for the next year? You only benefit the cost of price jumping from now to later minus all your tank costs.
