Oil plunging

[Southpaw]

Hah. Cheaper gas? The carpetbaggers are plying their trade again/still.

Despite reassurances from Goldman's Jeffrey Curries that global demand is "rock solid," it appears anxiety over US shale production, rising inventories, and questions over OPEC's deal extensions (as well as insanely extreme long speculative positioning) has sparked significant weakness in oil prices...

Despite the selloff in equities and oil markets, fundamentals “are very much intact,” Jeffrey Currie, global head of commodities research at Goldman Sachs, says in comments on Bloomberg TV and radio.

Global financial markets are “getting a taste of” what oil market saw last year with corrections.

But WTI is back with a %59 handle for the first time since 2017...

 

[Zobaczcie suki]

Thought we had an older thread on this. Anyway, oil now below $18 a barrel lowest price since 2001.
https://www.cnn.com/2020/04/17/business/oil-prices-crash-opec-trump/index.html


And not much difference in the price at the pump anyway. Ridiculous.

 

[Southpaw]

Thought we had an older thread on this. Anyway, oil now below $18 a barrel lowest price since 2001.
https://www.cnn.com/2020/04/17/business/oil-prices-crash-opec-trump/index.html


And not much difference in the price at the pump anyway. Ridiculous.

wholesale refined gas futures $0.60 - 0.70. Pump prices more than double/triple.

 

[Zobaczcie suki]

wholesale refined gas futures $0.60 - 0.70. Pump prices more than double/triple.

Crazy.

What is the explanation for this? I thought that a reduction in demand and an increase in supply was supposed to lower prices.

At least that is what my Free Enterprise teacher at Westwood High used to teach.

 

[dscher]

Crazy.

What is the explanation for this? I thought that a reduction in demand and an increase in supply was supposed to lower prices.

At least that is what my Free Enterprise teacher at Westwood High used to teach.

Not too great on the fundamental picture with the oil industry. But, from what I've heard and read, it is mostly due to extra cost to the producers and distributors based on what is happening with our current economic situation. That's the jist. I'll maybe try to dig up the well thought out explanation on this.

 

[Russ Smith]

It also doesn't help that the POTUS is actively trying to prop up the petroleum industry. went from touting lower gas prices as a great tax break, to actively lobbying to get a deal that would INCREASE the price of oil and stabilize the price of gas.

I know they are businesses and if they fail it would be a problem, but they weren't even remotely close to failing.

 

[AZCB34]

It also doesn't help that the POTUS is actively trying to prop up the petroleum industry. went from touting lower gas prices as a great tax break, to actively lobbying to get a deal that would INCREASE the price of oil and stabilize the price of gas.

I know they are businesses and if they fail it would be a problem, but they weren't even remotely close to failing.

It's not about the big oil companies failing it is the smaller companies that support the big companies that are at risk. Any issues with the big companies would likely result in industry consolation.

When we bailed out the auto makers is was as much, if not more, about all the parts suppliers that fed into the auto industry.

 

[dscher]

A barrel of oil will be the same as a pack of gum soon. Down another 15%.

 

[BigRedRage]

rampant unemployment among oil producers in our country due to the middle east releasing so much oil that prices dropped below production costs in the country. This leads to less income for oil giants and smaller oil companies laying off working in masse = no reduce prices.

 

[Zobaczcie suki]

It's not about the big oil companies failing it is the smaller companies that support the big companies that are at risk. Any issues with the big companies would likely result in industry consolation.

When we bailed out the auto makers is was as much, if not more, about all the parts suppliers that fed into the auto industry.

I don't mind bailing out the workers, the oil companies not so much.

Also, can't we help those people while letting the price of gas fall, thereby helping consumers?

 

[Zobaczcie suki]

Looks like you can get a barrel of oil for cheaper than a gallon of gas right now, wow!!

What's happening: US oil prices plunged 94%, falling as low as $1.02 per barrel Monday. That's the lowest level since NYMEX opened oil futures trading in 1983.

https://www.cnn.com/2020/04/20/investing/premarket-stocks-trading/index.html

 

[Dback Jon]

.40 cents now

 

[BigRedRage]

I don't mind bailing out the workers, the oil companies not so much.

Also, can't we help those people while letting the price of gas fall, thereby helping consumers?

if gas prices fuel the industry, low gas prices mean major cutbacks, especially for the smaller oil companies.

 

[BigRedRage]

I am not familiar with trading commodities but it seems oil is the place to be buying right now.

 

[BigRedRage]

withing going commodities, Exxon is down to about $40 a share, down from $70/$80. Even if it only came back up to 60, you would make some nice coin on a 5k+ investment.

 

[elindholm]

So help me out here. If I buy futures at -30something, can I hold them a couple of weeks, assume that the price will get back to zero, and then sell them for a profit? Really?

 

[dscher]

Coming soon. Negative rates that will have investors PAY the government to hold its debt. Buying influence possibly. We'll see. Strange times indeed.

 

[Zobaczcie suki]

Looks like Gas is now expected to be under $1.00/gallon in 13 states
https://abc7news.com/finance/gas-prices-fall-to-under-$1-in-13-states-during-pandemic/6116861/

And Oil? Apparently, you can't give it away...

What's happening: US oil prices plunged, falling below $0 Monday to $-37.63 a barrel. That's the lowest level since NYMEX opened oil futures trading in 1983.

https://www.cnn.com/2020/04/20/investing/premarket-stocks-trading/index.html

 

[Folster]

So help me out here. If I buy futures at -30something, can I hold them a couple of weeks, assume that the price will get back to zero, and then sell them for a profit? Really?

Not really because today was the last day of trading for the May contract. What we saw today was a speculative game of hot potato. Nobody has the room to store the oil and speculators who were just holding contracts with no intent to take delivery had to sell them and got burned.

If you had a place to store it and were an accredited investor, then you could've made had a field day today.

 

[dscher]

Anyone get in on this parabolic frenzy the past couple years?!