Oil Price



  • Price of WTI Crude oil has gone down 99% today. Effectively worthless:

    https://oilprice.com/



  • @sparky yeah, traded as low as -23.

    Although worth noting next months future is 30 ish.



  • @MajorRage said in Oil Price:

    @sparky yeah, traded as low as -23.

    Although worth noting next months future is 30 ish.

    Yeah it is an immediate demand v storage issue. Still bloody weird though.



  • not only that, it sucks to be pushing renewables at the moment. Ironic (and unintended) - we finally destroy oil demand, and guess what - the price plummets meaning renewables struggle to compete.

    Markets do what they want, but 'effectively free' is incredible. Has this ever happened before?



  • @nzzp ummmm .... that’s supply and demand.

    Electric cars still not cheap enough to buy for economic reasons.



  • @MajorRage said in Oil Price:

    @nzzp ummmm .... that’s supply and demand.

    Electric cars still not cheap enough to buy for economic reasons.

    Had a meeting a couple of months ago with the manager of a prominent ESG fund and he was banging on about their investing in electric vehicles. I asked him about the environmental impact of battery disposal and he went quiet for a bit before suggesting that it was all a step in the right direction and that was the important bit. I can sort of get that the costs and other impactful issues are things that should improve with time but I’m buggered if I’m going to be part of that expensive experiment until we have something more concrete.

    And something that sounds a lot better. 😎



  • @MajorRage said in Oil Price:

    @nzzp ummmm .... that’s supply and demand.

    Yep, I know - that's what I said in my post.

    Interested to know though if the modelling for renewables being cost effective includes dropping oil prices as the demand drops off as well. It's a tough market to fight if you are serious about reducing carbon (and may be an argument for a carbon tax/cap+trade scheme of some form)



  • Whatever happened to Peak Oil?



  • @nzzp said in Oil Price:

    @MajorRage said in Oil Price:

    @nzzp ummmm .... that’s supply and demand.

    Yep, I know - that's what I said in my post.

    Interested to know though if the modelling for renewables being cost effective includes dropping oil prices as the demand drops off as well. It's a tough market to fight if you are serious about reducing carbon (and may be an argument for a carbon tax/cap+trade scheme of some form)

    Reduction in demand is just a blip. Normal service will resume in due course. The long term case for renewables is unchanged.



  • The recent surge in price - based on the Saudi cuts that were actually bs - meant some people bought the April futures contract.
    How the contract works is on expiry, you either exit your position or you roll to the next month.
    If you do neither, if you sold the futures you have to deliver physical oil and if you bought the futures, you have to take the oil.
    As the storage is all full and delivery of the contract is for specific land based storage, those that were Long and unable to store, had to sell at negative numbers.
    It was a smart move by people that still had storage - they sold high and are now getting paid to take their own barrels.
    The real value of crude is the May contract.



  • Will there be any fallout from the Hin Leong Trading losses/bankruptcy?



  • @sparky said in Oil Price:

    Whatever happened to Peak Oil?

    He was in Palmerston North and probably caught a STD?

    You may be talking about the broader topic than one ferner though.

    More on topic - no airlines or demand for how long? Lockdowns and individual travel is one thing, but the bigger picture for oil and demand ain't great for a while. Trump is probably right to fill up the tanks and sit on it.



  • @Snowy said in Oil Price:

    @sparky said in Oil Price:

    Whatever happened to Peak Oil?

    He was in Palmerston North and probably caught a STD?

    You may be talking about the broader topic than one ferner though.

    More on topic - no airlines or demand for how long? Lockdowns and individual travel is one thing, but the bigger picture for oil and demand ain't great for a while. Trump is probably right to fill up the tanks and sit on it.

    I’m not sure that’s his doing. The stuff keeps getting pumped out of the earth, it’s just not being used. You can’t simply shut down an industry like that. Certainly not in the time frame we’re talking about here.



  • @Snowy said in Oil Price:

    @sparky said in Oil Price:

    Whatever happened to Peak Oil?

    He was in Palmerston North and probably caught a STD?

    You may be talking about the broader topic than one ferner though.

    More on topic - no airlines or demand for how long? Lockdowns and individual travel is one thing, but the bigger picture for oil and demand ain't great for a while. Trump is probably right to fill up the tanks and sit on it.

    More likely his head exploded as he bought into too much of the scare mongering stuff he was pushing.



  • Price of Brent Crude down 20% today to 21 dollars a barrel.



  • @Tim the HL bankruptcy is a big thing. They have said the Singapore bank exposure is 600M - but I suspect it is much larger. Total bank exposure is said to be 3B and again, I think that is understated. HL owes money to Petrochina, they will probably also owe a lot to Formosa (Taiwan oil company) as they did a lot of business with those companies. The real problem though is all the companies that have trades with HL - the derivative trades that were losers for HL. These can be based on a much higher oil price and if that is part of a counterparty hedge strategy - that counterparty is now taking the full hit on the flat price fall. This could hit big companies like Total, BP etc - all of whom do business with HL.
    Expect a lot of arrests, a lot of 'resignations' and a few people going missing



  • Brent Crude below 20 dollars a barrel.



  • @Catogrande said in Oil Price:

    I’m not sure that’s his doing. The stuff keeps getting pumped out of the earth, it’s just not being used. You can’t simply shut down an industry like that. Certainly not in the time frame we’re talking about here.

    Was referring to what Trump said in press conference yesterday that US reserves will be full for the first time in years. Adding 75 million barrels. So yes he is buying it up cheap and sitting on it.

    https://www.marketwatch.com/story/trump-seeks-to-add-75-million-barrels-of-oil-to-strategic-petroleum-reserve-amid-historic-price-crash-2020-04-20



  • @Snowy said in Oil Price:

    @Catogrande said in Oil Price:

    I’m not sure that’s his doing. The stuff keeps getting pumped out of the earth, it’s just not being used. You can’t simply shut down an industry like that. Certainly not in the time frame we’re talking about here.

    Was referring to what Trump said in press conference yesterday that US reserves will be full for the first time in years. Adding 75 million barrels. So yes he is buying it up cheap and sitting on it.

    https://www.marketwatch.com/story/trump-seeks-to-add-75-million-barrels-of-oil-to-strategic-petroleum-reserve-amid-historic-price-crash-2020-04-20

    Hmm. If yesterday he was looking for Congress to approve a move he may have missed that boat already. Dunno for sure but that piece sounds like talking a good talk rather than walking a good walk. Good politics on his part regardless though.



  • @Catogrande I did actually see the press conference when he said it. Whether he follows through, or is able to, we will see. If it doesn't happen then someone will call him on it no doubt.


Log in to reply