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The New Coffee Room

  1. TNCR
  2. General Discussion
  3. Oil Futures

Oil Futures

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  • 8 Offline
    8 Offline
    89th
    wrote on 20 Apr 2020, 18:44 last edited by
    #22

    Sooooo........should I buy Halliburton?

    Is this just reflecting the surplus in supply, minimal demand, and no place to store the actual dinosaur juice?

    8 1 Reply Last reply 29 Apr 2020, 01:52
    • J jon-nyc
      20 Apr 2020, 14:27

      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.

      J Online
      J Online
      jon-nyc
      wrote on 20 Apr 2020, 18:50 last edited by jon-nyc
      #23

      @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

      "You never know what worse luck your bad luck has saved you from."
      -Cormac McCarthy

      I L 2 Replies Last reply 20 Apr 2020, 19:05
      • 8 89th
        20 Apr 2020, 16:40

        I don't really understand oil futures. Maybe I'm the only one.

        X Offline
        X Offline
        xenon
        wrote on 20 Apr 2020, 18:53 last edited by
        #24

        @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.

        1 Reply Last reply
        • J jon-nyc
          20 Apr 2020, 18:50

          @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

          I Offline
          I Offline
          Improviso
          wrote on 20 Apr 2020, 19:05 last edited by
          #25

          @jon-nyc At this rate, I could store 310 barrels in my pool and they would pay me $9500 to do it. ๐Ÿค”

          We have the freedom to choose our actions, but we do not get to choose our consequences.
          Yes, there are two paths you can go by, but in the long run, there's still time to change the road you're on.

          1 Reply Last reply
          • J jon-nyc
            20 Apr 2020, 18:50

            @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

            L Offline
            L Offline
            Loki
            wrote on 20 Apr 2020, 19:33 last edited by
            #26

            @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.

            1 Reply Last reply
            • J Jolly
              20 Apr 2020, 14:16

              @Doctor-Phibes said in Oil Futures:

              Oh, that's really not good for anybody working in the petrochem industry.

              Hurts us, fer shur.

              D Online
              D Online
              Doctor Phibes
              wrote on 20 Apr 2020, 20:32 last edited by
              #27

              @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.

              I was only joking

              1 Reply Last reply
              • J Jolly
                20 Apr 2020, 14:16

                @Doctor-Phibes said in Oil Futures:

                Oh, that's really not good for anybody working in the petrochem industry.

                Hurts us, fer shur.

                A Away
                A Away
                Axtremus
                wrote on 20 Apr 2020, 21:01 last edited by
                #28

                @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.

                1 Reply Last reply
                • M Away
                  M Away
                  Mik
                  wrote on 20 Apr 2020, 21:15 last edited by
                  #29

                  Those two picked a bad time to make a glut, thatโ€™s for sure.

                  โ€œI am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.โ€ ~Winston S. Churchill

                  1 Reply Last reply
                  • C Offline
                    C Offline
                    Copper
                    wrote on 20 Apr 2020, 22:47 last edited by
                    #30

                    So anyone with a significant interest in oil will certainly become an ally of the ReOpen people.

                    Lots of new alliances will be made.

                    1 Reply Last reply
                    • J Online
                      J Online
                      jon-nyc
                      wrote on 20 Apr 2020, 22:54 last edited by
                      #31

                      I wonder how many systems are breaking right now on that negative number.

                      "You never know what worse luck your bad luck has saved you from."
                      -Cormac McCarthy

                      G 1 Reply Last reply 20 Apr 2020, 23:00
                      • J jon-nyc
                        20 Apr 2020, 22:54

                        I wonder how many systems are breaking right now on that negative number.

                        G Offline
                        G Offline
                        George K
                        wrote on 20 Apr 2020, 23:00 last edited by
                        #32

                        @jon-nyc said in Oil Futures:

                        I wonder how many systems are breaking right now on that negative number.

                        ::insert "You divided by zero" meme here::

                        "Now look here, you Baltic gas passer... " - Mik, 6/14/08

                        The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

                        1 Reply Last reply
                        • J Online
                          J Online
                          jon-nyc
                          wrote on 21 Apr 2020, 02:45 last edited by
                          #33

                          Seen on twitter

                          BREAKING - DUE TO THE RAPID CAPITULATION IN MAY 2020 OIL CONTRACT, OIL WILL NO LONGER BE QUOTED IN VOLUMES OF EXPENSIVE STEEL BARRELS BUT IN 42 GALLON GARBAGE BAGS

                          "You never know what worse luck your bad luck has saved you from."
                          -Cormac McCarthy

                          1 Reply Last reply
                          • L Offline
                            L Offline
                            Loki
                            wrote on 21 Apr 2020, 14:57 last edited by
                            #34

                            Of all ironies as the last cruise ship gets a port, supertankers take their place floating aimlessly in the ocean.

                            Who could have written that script 3 months ago?

                            1 Reply Last reply
                            • 8 Offline
                              8 Offline
                              89th
                              wrote on 21 Apr 2020, 16:47 last edited by
                              #35

                              USO (an oil ETF) is down 33% today, as of right now, at least.

                              1 Reply Last reply
                              • J Online
                                J Online
                                jon-nyc
                                wrote on 28 Apr 2020, 12:47 last edited by
                                #36

                                932B8FFE-5E8A-4B1A-9EB0-AF4621F557E1.jpeg

                                "You never know what worse luck your bad luck has saved you from."
                                -Cormac McCarthy

                                1 Reply Last reply
                                • 8 Offline
                                  8 Offline
                                  89th
                                  wrote on 28 Apr 2020, 13:07 last edited by
                                  #37

                                  Haha that is so good

                                  1 Reply Last reply
                                  • 8 89th
                                    20 Apr 2020, 18:44

                                    Sooooo........should I buy Halliburton?

                                    Is this just reflecting the surplus in supply, minimal demand, and no place to store the actual dinosaur juice?

                                    8 Offline
                                    8 Offline
                                    89th
                                    wrote on 29 Apr 2020, 01:52 last edited by
                                    #38

                                    @89th said in Oil Futures:

                                    Sooooo........should I buy Halliburton?

                                    I should've. It's up 25% since I asked that question. ๐Ÿ™‚

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