^
1) Massive demand shock with much of the world demand for petroleum on shut down stay at home orders.... leading to the on going supply glut getting building at a nearly never before seen rate.
2) In the midist of that setting the russinas and Saudis start playing chicken with increasing production and selling at steep discounts from trade values to bigger customers, ( I think a calculated play to get the US shale production to shut in as both those players have been trying for years to get that to happen, which they have largely gotten to happen)
3) oil futures fell to negative on monday as traders began to realize that Storage Capacity in the on shore US infrstructure is nearing top off capacity and they were not going to have anywhere to put the oil if they took delivery so they began to charge producers to take it and find homes for all those barrels. We do have about 75m barrels worth of capacity in the federal Strategic petroleum reserve that was lowered a few times during the O mans reign to help ease pricing when oil prices would spike. Orangemanbad wanted to top off with the lower current pricing but the funding was blocked by the militant Dems in the house as a "Big Oil Bail Out" . Granted 75m ish barrels is a drop in the bucket in the scope of the global demand glut we have going on, but it would give a place to go for the 2.8m a day coming out of the Permian Basin in TX for a month or so at very steep discounts to the tax payers at current price. That coupled with the global production cuts including here in the US might let some of the mid and smaller independent producers to keep their heads above water just long enough to keep from being bought for pennies on the dollar, by the Majors looking for deals.
4) look for Natural gas prices to go up about the start of winter heating season this year as a by product of these ultra low oil prices, as the shutting in of oil driven wells in TX, NM, ND etc, is going to shut in a lot of by product natural gas from those wells getting to market and keeping supply high despite the current lack of shipping capacity to get it to market from those basins. If things get back to semi normal we will hit heating season on the short side of the BTUs needed to keep houses and industry warm next winter so pricing will go up accordingly....
-
-
Guys, would just like to point out that the stimulus is not an advance on future tax returns. You do not, and will not have to pay it back. Per the treasury and irs. Otherwise, hope you are all doing well.Leave a comment:
-
Maybe just frame it and put it on the wall for awhile as every check will now have Trump's signature on it. It's hard to make shit like this up.Originally posted by 2mAn
Leave a comment:
-
^ This really peeved me last week. Aside from "his friend" being a despot Murderer, it manipulated the market in a careless way. Trump's subsequent tweets and tv soundbites talked up a 15M barrel cut, analysts then took it to new levels speculating 30M. The Oil market spiked on the rumor, even though it came out only hours later that it was a myth - the Russians and the Saudis hadn't spoke.
The real stupid thing here is that the original deal they couldn't come to an agreement on was a cut of 1.5M. There's a 10x difference between that and the rumor. So, this morning, when they did reach a deal, it of course underwhelmed expectations and oil tanked. Beyond that, there's other significant countries that affect the global oil trade, including the US, and they are not on board with cutting production. Oil will continue to sink and that'll be good for us at the pump, but it's definitely going to have a big impact on jobs in the US as we've become the top producer in the world over the last decade. 40% of US Producers will become insolvent if Oil stays below $30/barrel. We are at $23 and there is room to slide as the global economy slows.
It's also a nice moment to point out that we are in anything but a "free market economy" -- where we grovel to countries to tweak and fix the prices where we want them, deal with cartels, all while greatly subsidizing these wealthy industries, and threaten & impose tariffs. And if a huge company involved should wobble or fail, we can aim the Fed money cannon at them and bail them out in some fashion. It's the United States of Corporate Socialism.Last edited by phillipj; 04-09-2020, 12:16 PM.Leave a comment:
-
-
Yeah, here in Louisiana I do design work for plants and refineries.
The gas crunch has already to us laying off about 1/3 of the office between Baton Rouge and Houston.Leave a comment:
-
-
The oil situation ios about to get worse, too. 14 billion more barrels of crude oil was shipped from Saudi...
Leave a comment:
-
-
+1. Extremely sad.
$1.34? Damn. About 1/2 the price of here. Gas is still $2.70-ish at the lowest spots in Los Angeles proper. Parts of LA still blow my mind where you'll see one station at $5.50/gallon and then you drive 2 blocks down the street and it's like $2.89.
I will say a weird plus to this pandemic/shutdown is experiencing LA with no traffic, it's like a bizarro world. NPR this morning also was saying they've been measuring some of the highest air quality in the entire US lately, too.Last edited by phillipj; 04-08-2020, 09:40 AM.Leave a comment:
-
Gas is $1.34 near me, it's pretty wild.
I just find it sad that so many in this country don't seem to have at least a couple months living expenses to fall back on. It's like everybody maximizes their spending amount and not the amount they can save. I'm freaking out if I don't feel like I have at least six months saved up, though my monthly mortgage, including taxes and insurance, is probably half a typical apartment rent (or less than a 1/4 if you're in somewhere like LA or NY). And I don't have any kids...Leave a comment:
Leave a comment: