Oil Futures
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wrote on 20 Apr 2020, 14:52 last edited by jon-nyc
@Loki said in Oil Futures:
How much can we charge to store it?
If you look way out I think it’s still 45 a barrel.
Not that high, but yeah, this is all about storing oil at 3pm on Wednesday in Cushing, Oklahoma.
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wrote on 20 Apr 2020, 14:55 last edited by
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wrote on 20 Apr 2020, 15:07 last edited by
Man, if you had a place to store it.....
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wrote on 20 Apr 2020, 15:10 last edited by
I'd love to know what's happening behind the scenes right now on the physical side.
It's gotta be crazy.
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wrote on 20 Apr 2020, 15:10 last edited by
We have room for another 90 million barrels right now. We should get it.
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wrote on 20 Apr 2020, 16:40 last edited by
I don't really understand oil futures. Maybe I'm the only one.
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wrote on 20 Apr 2020, 16:42 last edited by
I mean, I've google'd but still... what a different world to do business in.
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wrote on 20 Apr 2020, 17:58 last edited by
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wrote on 20 Apr 2020, 17:59 last edited by
It just hit 10 cents a barrel.
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wrote on 20 Apr 2020, 18:10 last edited by
Negative : -1.43 a barrel. Unbelievable.
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wrote on 20 Apr 2020, 18:12 last edited by
At this rate, they are going to pay us to fill up our cars.
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wrote on 20 Apr 2020, 18:44 last edited by
Sooooo........should I buy Halliburton?
Is this just reflecting the surplus in supply, minimal demand, and no place to store the actual dinosaur juice?
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May futures expire tomorrow. If you're long you gotta accept delivery. There's no where to store it. In theory it could go negative.
wrote on 20 Apr 2020, 18:50 last edited by jon-nyc@jon-nyc said in Oil Futures:
May futures expire tomorrow. If you're long you gotta accept delivery. There's no where to store it. In theory it could go negative.
And it did!
https://www.barrons.com/articles/oil-futures-fall-below-1-for-first-time-ever-51587406408
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wrote on 20 Apr 2020, 18:53 last edited by
@89th said in Oil Futures:
I don't really understand oil futures. Maybe I'm the only one.
There's a lot of implications and math that falls out from the basic structure. But the basic structure is quite simple:
The spot price is the price of a commodity today.
The futures price is the price of a commodity at a specific point in the future.
The futures price includes the cost of carrying and storing the commodity until the "delivery date".
Those two prices converge as the future date gets closer to today (spot price)
In this case, storage in May is expected to be full - which significantly increases storage and carrying costs. This makes the commodity itself quite unattractive and is the reason why we're seeing next to zero or even negative prices.
At this point full storage isn't priced into later months (July, August, etc.) - so those prices are still positive.
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@jon-nyc said in Oil Futures:
May futures expire tomorrow. If you're long you gotta accept delivery. There's no where to store it. In theory it could go negative.
And it did!
https://www.barrons.com/articles/oil-futures-fall-below-1-for-first-time-ever-51587406408
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@jon-nyc said in Oil Futures:
May futures expire tomorrow. If you're long you gotta accept delivery. There's no where to store it. In theory it could go negative.
And it did!
https://www.barrons.com/articles/oil-futures-fall-below-1-for-first-time-ever-51587406408
wrote on 20 Apr 2020, 19:33 last edited by@jon-nyc said in Oil Futures:
@jon-nyc said in Oil Futures:
May futures expire tomorrow. If you're long you gotta accept delivery. There's no where to store it. In theory it could go negative.
And it did!
https://www.barrons.com/articles/oil-futures-fall-below-1-for-first-time-ever-51587406408
Hey, I asked earlier how much could we charge to store it.
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@Doctor-Phibes said in Oil Futures:
Oh, that's really not good for anybody working in the petrochem industry.
Hurts us, fer shur.
wrote on 20 Apr 2020, 20:32 last edited by@Jolly said in Oil Futures:
@Doctor-Phibes said in Oil Futures:
Oh, that's really not good for anybody working in the petrochem industry.
Hurts us, fer shur.
Hurts here, too. At least half our business is with people servicing the oil industry.
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@Doctor-Phibes said in Oil Futures:
Oh, that's really not good for anybody working in the petrochem industry.
Hurts us, fer shur.
wrote on 20 Apr 2020, 21:01 last edited by@Jolly said in Oil Futures:
Hurts us, fer shur.
Will hurt Russia even more, and just about any regime whose oil export represents a big fraction of national income.
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wrote on 20 Apr 2020, 21:15 last edited by
Those two picked a bad time to make a glut, that’s for sure.
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wrote on 20 Apr 2020, 22:47 last edited by
So anyone with a significant interest in oil will certainly become an ally of the ReOpen people.
Lots of new alliances will be made.
