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Posted on 4/20/20 at 1:50 pm to NC_Tigah
How does that even work; they pay you to take it?
Posted on 4/20/20 at 1:51 pm to NC_Tigah
What are they doing at that point, putting it back in the ground?
Posted on 4/20/20 at 1:51 pm to NC_Tigah
The May oil futures contracts expire tomorrow. For holders of those contracts if they don't sell their contracts now, they will be obligated to take physical delivery of the oil.
Since there's no place to store the oil cheaply, the holders of those contracts are effectively selling the oil for the price the buyer would have to pay to store the physical oil.
Since there's no place to store the oil cheaply, the holders of those contracts are effectively selling the oil for the price the buyer would have to pay to store the physical oil.
Posted on 4/20/20 at 1:57 pm to LSURussian
quote:How could it cost $37/bbl to temporarily store oil?
Since there's no place to store the oil cheaply, the holders of those contracts are effectively selling the oil for the price the buyer would have to pay to store the physical oil.
Bizarro world
Posted on 4/20/20 at 2:03 pm to NC_Tigah
quote:
How could it cost $37/bbl to temporarily store oil? Bizarro world
Where at? A storage facility that is already filled.
Imagine Antonio Moss buys a Roach Motel trap for his single wide, it fills up with say 10 roaches - capacity. But Antonio Moss's single wide is a shite hole, and the roaches keep coming day after day. Where do all the roaches go if Antonio Moss's capacity to store said roaches is full?
This post was edited on 4/20/20 at 2:05 pm
Posted on 4/20/20 at 2:06 pm to NC_Tigah
quote:According to what I read, most oil storage facilities are 100% maxed out.
How could it cost $37/bbl to temporarily store oil?
So the only other way to store oil temporarily is to put it in abandoned pipelines, on tanker trucks or tanker railroad cars, on barges or on ships.
Today is a perfect example of oil speculators getting their arse handed to them. It's a bunch of pencil-necked geeks sitting at their computers buying oil futures contracts and none of them has ever actually seen a bucket of crude oil, much less 10,000 barrels of crude oil.
This post was edited on 4/20/20 at 2:42 pm
Posted on 4/20/20 at 2:07 pm to NC_Tigah
quote:
How could it cost $37/bbl to temporarily store oil?
Bizarro world
You gonna store it in your pool?
Posted on 4/20/20 at 2:10 pm to WPBTiger
quote:
Time for the Dems to allow Trump to fill up all the oil reserves to the top.
i think they already are
Posted on 4/20/20 at 2:10 pm to LSURussian
quote:
Today is a perfect example of oil speculators getting their arse handed to them. It's a bunch of pencil-necked geeks sitting at their computers buying oil futures contracts and none of them has ever actually seen a bucket of crude oil, much less 10,000 barrels of crude oil.
You...I like you.
Posted on 4/20/20 at 2:11 pm to NC_Tigah
quote:
How could it cost $37/bbl to temporarily store oil?
Normal times it's about $1.5-$2.5/bbl/month turnover is less than a week.
Posted on 4/20/20 at 2:11 pm to udtiger
quote:Im buying, it is going to make me rich
It's back "up" to -24.00
Posted on 4/20/20 at 2:11 pm to LSURussian
quote:
The May oil futures contracts expire tomorrow. For holders of those contracts if they don't sell their contracts now, they will be obligated to take physical delivery of the oil.
does this mean prices should start going back up after the contracts expire?
Posted on 4/20/20 at 2:12 pm to Choctaw
quote:
i think they already are
I thought Congress didn't approve any SPI funding in the last stimulus bill? And (technically) wouldn't Congress have to appropriate funds even if it ends up making money for the US Treasury?
Posted on 4/20/20 at 2:12 pm to LSURussian
quote:
According to what I read, most oil storage facilities are 100% maxed out.
Some dude on Fox News was saying this morning that we aren't at capacity for storage because we've been bleeding reserves over the past year and that it'll be mid-May before they can fill everything up.
Hell we should build new reserves if oil is basically free now.
Posted on 4/20/20 at 2:12 pm to WPBTiger
quote:
Time for the Dems to allow Trump to fill up all the oil reserves to the top.
They've already pledged to take 23 mil barrels over the next 3 months.
Posted on 4/20/20 at 2:13 pm to LSURussian
quote:
put it in abandoned pipelines,
Talk about against the law. PHMSA would fine you so fast.
Posted on 4/20/20 at 2:13 pm to TNTigerman
Has to do with storage. If there is nowhere to store it then there is no way to unload it off of barges, ships, etc...
For example a panamax can hold 60,000 DWT so roughtly 450,000 barrels of oil. If the ship arrives and there is no where to offload it then the ship becomes the holding tank. Cost is probably $30,000 to $45,000 per day for a Panamax. This day rate does not stop until that ship is unloaded.
In 90 days you are talking $3M to $4M in day rates for the ship. This is why oil is trading so low. Crude is on ships, barges, and in pipelines all over the world. There is just no place to offload. Guarantee you there will be ships sitting with crude in them for 5-6 months or longer. This is how you end up with negative prices.
For example a panamax can hold 60,000 DWT so roughtly 450,000 barrels of oil. If the ship arrives and there is no where to offload it then the ship becomes the holding tank. Cost is probably $30,000 to $45,000 per day for a Panamax. This day rate does not stop until that ship is unloaded.
In 90 days you are talking $3M to $4M in day rates for the ship. This is why oil is trading so low. Crude is on ships, barges, and in pipelines all over the world. There is just no place to offload. Guarantee you there will be ships sitting with crude in them for 5-6 months or longer. This is how you end up with negative prices.
Posted on 4/20/20 at 2:17 pm to Choctaw
Jun finished $21, Jul around $22 (everyone will have rolled to June tomorrow, most already had prior to today). Prices are carries going out over a year from now. What happened to the spot market today was unprecedented for a commodity, but the market has been more focused on the June and July, not what's happening to a contract expiring tomorrow. Watch if JJ holds up the next few days
Posted on 4/20/20 at 2:17 pm to Tridentds
wait till two collide off the coast and we have an exxon disaster for the summer
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