Crude Oil at -$35 per barrel at 20 minutes until market close 4-20-2020

[Whiskey_Bravo]

First time it has ever fallen below zero. To be honest I am not really sure what that means?


https://finance.yahoo.com/quote/CL=F?p=CL=F



Found this explanation.
https://www.barrons.com/articles/apple-stock-soar-to-500-a-share-analyst-says-51587411641


Oil was down more than 200% in late trading Monday. Benchmark U.S. crude oil prices were at negative $25 a barrel. There isn’t anything much new about demand, OPEC or Covid-19. The move in oil futures has to do with factors such as storage limits and expiring contracts.

Oil is a commodity, not a stock price. And futures contracts have dates for delivery associated with them. The oil-futures contract for May delivery stopped trading on Monday. The June contract is at $20, so oil will magically be at $20 Tuesday morning.

[flenna]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

[JediGuy]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

Undoubtedly. I tried it a few minutes ago didn’t work, though.

[Sam]

OK, all you economics majors, explain that to me. Mansplain it if you must. I can take it.

[ChattanoogaPhil]

What it means is the first of many unknowns and unexpected around the corner. We shut down a global economy. This is uncharted territory. Just wait for the supply chain disruption surprises to manifest.

[FromMyColdDeadHand]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

[MegademiC]

So, if I go fill up my gas tank does that mean the gas station has to pay me?

Does the state have to pay us road tax?


These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

I shouldnt be surprised, but I just got into the market and never realized how over-the top the media is about the market during times like this. Day to day volatility existed back in August and I dont recall front page headlines.

Dow opens 3%high “MARKET RALLIES!!!!”
Down falls back to opening price: “MARKET TANKS AFTER [enter some news from the day] IS ANNOUNCED!!!!!”

[whatthepuck]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

Exactly, it’s an attention-getting headline that is irresponsible. Futures contracts that will start to trade later this week will still have barrels of oil priced at $20 or so a barrel. The negative prices per barrel are futures contracts for May that are expiring very soon. There is less than 0 demand for oil now. In a month, who knows?

[Whiskey_Bravo]

OK, all you economics majors, explain that to me. Mansplain it if you must. I can take it.

Read the second link in my original post. Basically explains that these are future contract prices. May futures stop trading tomorrow. So all of the speculators that don't actually intend to take delivery of oil are selling like crazy. I am not sure if this means they are selling their futures for negative(actually paying institutions to take them) or what though. The article says that by Wednesday it will magically be up around $20 again.

[Whiskey_Bravo]

These are futures prices, not what oil sells for, I think that is a big distinction that the headlines don't state.

Is the strategic reserve filled? Got some empty salt mines that we could use? Heck, even if some internet billionaire is using it currently as a virus shelter?

Agreed. And yes, we are filling our Strategic reserves but evidently we can only do it to the tune of about 2 million barrels per month. We will be full in about 4 months.




I am thinking about draining my pool. If I did the math right I should be able to hold about 357 barrels.... Seems like a solid plan to me.

[SilverBullet432]

I work for one of the largest independent E&P’s in the world. We haven’t heard anything as of now but we do have a planned town hall tomorrow. We took a paycut last week. As far as I know, we are hedged.

[FromMyColdDeadHand]

BYOB

Bring Your Own Barrel....

[Grand58742]

Agreed. And yes, we are filling our Strategic reserves but evidently we can only do it to the tune of about 2 million barrels per month. We will be full in about 4 months.

I am thinking about draining my pool. If I did the math right I should be able to hold about 357 barrels.... Seems like a solid plan to me.

I filled up my Mustang the other day and I have to put the 91 octane in. $12 later, I was full. I actually giggled when I saw the final price.

At the moment, I filled every gas powered device I own, went to the station and topped off every can I own (5 five gallon cans, 2 two gallon cans and a single gallon can for the chainsaw/weedeater) and dumped in some Pri-G. Each and every time I finish mowing, I'm going to top off the tank and refill the can.

[Mauser KAR98K]

Well, it's grim out here in North Dakota. May could see up to 75% of wells shutting in (as rumored). I haul oil out here and some of our competitors are shutting down. MBI is shutting everything down May 15. My company that is owned by a much larger company is mid-stream and down stream with our own pipeline and refinery. I was told not to worry and we will get through this.

May, no matter who you are, though, is going to suck. The happy medium for consumer and producer is about $60-80 a barrel. We're not drowning the consumer, but not taking a loss.

[SilverBullet432]

Well, it's grim out here in North Dakota. May could see up to 75% of wells shutting in (as rumored). I haul oil out here and some of our competitors are shutting down. MBI is shutting everything down May 15. My company that is owned by a much larger company is mid-stream and down stream with our own pipeline and refinery. I was told not to worry and we will get through this.

May, no matter who you are, though, is going to suck. The happy medium for consumer and producer is about $60-80 a barrel. We're not drowning the consumer, but not taking a loss.


Yep. We’re shutting in wells in the Delaware, Bakken and Eagle Ford..

[sundance435]

The “negative” price has already been more than adequately explained by a few already. I will add that the price spike upward will be just as sharp. Be ready for $200 oil in 2-3 years and enjoy this while it lasts. Oil supply is one of the capable of enduring huge, longer term disruptions like this. The economics of it force the big players to pump more oil when it is low to prop up their budgets. They have even less incentive to increase production when the price goes back up.

My biggest concern is the long-term impact on domestic exploration and recovery. Without a bailout, the domestic industry may never recover to pre-Covid levels. They are leveraged to badly to weather this for long.

[AKDoug]

The “negative” price has already been more than adequately explained by a few already. I will add that the price spike upward will be just as sharp. Be ready for $200 oil in 2-3 years and enjoy this while it lasts. Oil supply is one of the capable of enduring huge, longer term disruptions like this. The economics of it force the big players to pump more oil when it is low to prop up their budgets. They have even less incentive to increase production when the price goes back up.

My biggest concern is the long-term impact on domestic exploration and recovery. Without a bailout, the domestic industry may never recover to pre-Covid levels. They are leveraged to badly to weather this for long.
Alaska has been taking a beating all year. Dwindling production and low prices. Corona hit and all exploration stopped, so that will set our output back by a bunch in the upcoming years. Today simply woke up those Alaskans that weren't paying attention.

[teufelhund1918]

The “negative” price has already been more than adequately explained by a few already. I will add that the price spike upward will be just as sharp. Be ready for $200 oil in 2-3 years and enjoy this while it lasts. Oil supply is one of the capable of enduring huge, longer term disruptions like this. The economics of it force the big players to pump more oil when it is low to prop up their budgets. They have even less incentive to increase production when the price goes back up.

My biggest concern is the long-term impact on domestic exploration and recovery. Without a bailout, the domestic industry may never recover to pre-Covid levels. They are leveraged to badly to weather this for long.

Hopefully there might be a lesson learned from the chinese virus situation. When we open back up, get our oil industry back online before going back to foreign oil. The arabs are just as bad as the chinese.

oh yea.... MAGA.

[dante2]

Looking pretty grim here in Oklahoma as well. Production has completely stopped in my AO. Lots of producers are shutting in leases and waiting for prices to come back up. Cushing is almost full. Those of us that are hauling oil are not sure what each day will bring. Nobody in charge is talking.

[sundance435]

Looking pretty grim here in Oklahoma as well. Production has completely stopped in my AO. Lots of producers are shutting in leases and waiting for prices to come back up. Cushing is almost full. Those of us that are hauling oil are not sure what each day will bring. Nobody in charge is talking.

That's the biggest reason prices are going negative. Even with a 10+ million cut from OPEC+, there's nowhere to store it. That cut only accounts for about 30-40% of the overall decrease in demand. Just another example of supply chains evolving (or devolving) to being based on a constant and not capable of rapidly ramping up or down.

I haven't seen anything yet, but I hope there was something in Stimulus 3.5 to allow us to expand the strategic petroleum reserve - at least we'd save a few bucks doing it now and it would help slightly alleviate the storage problem. Yeah, I know, wishful thinking.

[Grand58742]

Looking pretty grim here in Oklahoma as well. Production has completely stopped in my AO. Lots of producers are shutting in leases and waiting for prices to come back up. Cushing is almost full. Those of us that are hauling oil are not sure what each day will bring. Nobody in charge is talking.

It's going to have a serious trickle down effect here in OK. We were talking about this yesterday at work and we could see the donations that typically go to universities and colleges drying up this year as well as the donations they typically send to cultural centers.

I think the last time I saw it with the potential to be this bad was in 2014 or so.

[Mauser KAR98K]

2014 is going to look like a Boom if this situation keeps up.

[Mauser KAR98K]

Was notified today we are going on a 5 and 3 schedule. Was 6 and 2. This could last for 3 months. Summer is generally when we are the busiest.

This does not boed well for the economy as a whole.

[teufelhund1918]

Not wishing bad things on anyone and this whole situation sux. But I don't understand what is going on with the stock market. With all the bad news on the economy going on... oil price drop, unemployment at record sky highs, meat processors shutting down, crops plowed under in the fields, profit losses, etc.. etc.. Everything points to horrible economic news, but it goes up. ??? The only answer I can come up with is manipulation. Is it possible? I think I can be done by people with the big $$$.

[rjacobs]

Not wishing bad things on anyone and this whole situation sux. But I don't understand what is going on with the stock market. With all the bad news on the economy going on... oil price drop, unemployment at record sky highs, meat processors shutting down, crops plowed under in the fields, profit losses, etc.. etc.. Everything points to horrible economic news, but it goes up. ??? The only answer I can come up with is manipulation. Is it possible? I think I can be done by people with the big $$$.

Here is my take on it:

A lot of these things are known/understood/expected... so they arent "bad news" they are just "news"... and people go "yea no shit there are 20 million on unemployment".

NOW if once we start to really re-open the country(not these bits and pieces we are doing now) and the metrics dont recover or stay in the shitter, I think the market wont like that.

But for now, these are all expected things.

I also think there are a lot of things going on in the background that dont make the news cycle. I read an article 2-3 weeks ago that was from a bunch of small business owners that once they were told to shut down, they laid everybody off immediately to get them on unemployment so they(the owner) could preserve cash in order to restart and bring all these people back ASAP. The fear they had was their employees not coming back because better jobs would be available.

And a final thought is ZIRP which will be around for a long time, yet again... so these institutional investors are now living high on the hog again investing free money.

[Life's a Hillary]

Not wishing bad things on anyone and this whole situation sux. But I don't understand what is going on with the stock market. With all the bad news on the economy going on... oil price drop, unemployment at record sky highs, meat processors shutting down, crops plowed under in the fields, profit losses, etc.. etc.. Everything points to horrible economic news, but it goes up. ??? The only answer I can come up with is manipulation. Is it possible? I think I can be done by people with the big $$$.

The stock market is not the economy. Don't forget we had a massive drop off and people are betting on companies that are strong and well suited to be able to rebound quickly when this is over. We could also be seeing another dead cat bounce where things are going to take another nose dive.

[MegademiC]

The stock market is the emotion of the economy.
Its very depressed right now, so when states mention opening up, it goes up, oil war has relief, it goes up.

Its still down, its just up from the day before.

[Grand58742]

The stock market is the emotion of the economy.
Its very depressed right now, so when states mention opening up, it goes up, oil war has relief, it goes up.

Its still down, its just up from the day before.

The Dow took three years to hit 30,000 and less than a month to go back to pre-Trump levels of around 19,000. The Dow is back up almost 5,000 points from where we were a couple of weeks ago, but it's still going to take a while to rebound back anywhere near where we were in the beginning of February.

Once we start opening back up more fully, I think you'll see another thousand point gain, but it's still going to take years to hit that 30K mark again if ever.

[sundance435]

Not wishing bad things on anyone and this whole situation sux. But I don't understand what is going on with the stock market. With all the bad news on the economy going on... oil price drop, unemployment at record sky highs, meat processors shutting down, crops plowed under in the fields, profit losses, etc.. etc.. Everything points to horrible economic news, but it goes up. ??? The only answer I can come up with is manipulation. Is it possible? I think I can be done by people with the big $$$.

The market is trading entirely on sentiment right now, which is why I would recommend anyone hold off on buying in. No, the markets are not the economy, but they are a reasonable representation of the future expectations for the economy.

There is so much bad news out there for markets that traders are seemingly ignoring. All it will take is a setback with a vaccine candidate to send it back down 5-10%, because, as I said, it's all sentiment. The market has already priced in an "early open" for the economy and if that doesn't come into play, again, market is down 10%+. I've been watching the recent technical bull with trepidation as I feel it is setting us up for a lower low if things don't play out along the lines of the markets' relatively rosy assumptions.

[teufelhund1918]

The market is trading entirely on sentiment right now, which is why I would recommend anyone hold off on buying in. No, the markets are not the economy, but they are a reasonable representation of the future expectations for the economy.

There is so much bad news out there for markets that traders are seemingly ignoring. All it will take is a setback with a vaccine candidate to send it back down 5-10%, because, as I said, it's all sentiment. The market has already priced in an "early open" for the economy and if that doesn't come into play, again, market is down 10%+. I've been watching the recent technical bull with trepidation as I feel it is setting us up for a lower low if things don't play out along the lines of the markets' relatively rosy assumptions.

I'm far from understanding investing and investments, but this is what "worries" me. Lots to say about the whole situation, but investors seem to be ignoring what is actually going on vs what they hope will happen. It takes one little bit of bad or good news for the markets to go through crazy wild swings. Even though this virus crap has gone on for a while, it seems to me that they still don't know exactly what they are dealing with. Just lots of speculation on the virus. And without understanding it, they are trying to go back to "normal". Not trying to sound like Chicken Little, but people have forgotten about what happened with the flu pandemic of 1918. It seems like we are following the same path today.

[rjacobs]

The Dow took three years to hit 30,000 and less than a month to go back to pre-Trump levels of around 19,000. The Dow is back up almost 5,000 points from where we were a couple of weeks ago, but it's still going to take a while to rebound back anywhere near where we were in the beginning of February.

Once we start opening back up more fully, I think you'll see another thousand point gain, but it's still going to take years to hit that 30K mark again if ever.

Markets go down like elevators and up like escalators. Thats how its always been and thats how it probably always will be.

[WS6]

All I know is that this was the perfect storm for me to wade into the stock market with. I took $2625 in seed money, and put it into oil, and will see where time takes my little ship. Everything seems bad right now, but I decided to try to benefit where I can, even as Rome burns around me, because my only other choice is to not try to improve my lot.

[Mauser KAR98K]

Just got the phone call. I'm being furloughed.

[Grand58742]

Just got the phone call. I'm being furloughed.

Sorry to hear that.

[dante2]

Sorry to hear that too Mauser. I'm probably not too far behind you. We furloughed 56 drivers on Friday and switched to days only. We're struggling to get 40 hours with everyone starting to shut in wells. There will be another round of furloughs coming real soon I'm sure.

[Mauser KAR98K]

All I can say is thank you Russia, China, and the Democratic nit with for killing the economy.

I'm going back to Tennessee, do reloads, fend mt moms property (RN nurse still working through this) and wait for the call up.

Sum-bitch as we say down South.