Well, oil be damned

[essayer]

I just saw a chart where oil was trading at $0 per barrel

Can someone explain what is going on

[jfdi]

Simplified - Massive costs in shutting down wells and all storage space is full, so basically giving it away.

[Saweep]

Is it possible to go under £0 ie the producers paying for it to be taken away?

Can't see how it's possible to just shut down production.

[Vanden Saab]

Yay another 1p off a litre at the pumps then...

[bitchstewie]

essayer said:

I just saw a chart where oil was trading at $0 per barrel

Can someone explain what is going on

My very limited understanding is that a lot of todays moves are due to a specific contract that expires imminently.

It's a bit like pass the parcel with a parcel that nobody wants to be left holding as apparently you physically own it.

[essayer]

So my layman’s understanding: basically nobody wants oil in May because factories are shut, electricity generation is low etc; but after then there’s still some optimism around $20-$30 ?

[Mojooo]

https://www.youtube.com/watch?v=1ST9TZBb9v8

[bitchstewie]

Good easy to understand explanation (must be as I think I understood it!).

https://www.cnbc.com/2020/04/20/this-oil-price-cra...

[pequod]

20 years ago, I pulled a large plug from a multi-national E&P project as we couldn't make the economic case for further investment. The three case studies were based on a $/barrel scenario of 14/16/18 USD. That turned out to be a bad call but no one in the consortium believed we could achieve even $18 let alone the stratospheric rise since then.

There will be many projects scrambling for a way out of further commitments now and attempting to reduce costs to an absolute minimum, but that is a problem with most production facilities without total abandonment and complete loss of investment.

Good luck!

[essayer]

Can I just request a load, get paid $7/barrel then set fire to it in May?

[easytiger123]

It's trading -$11.70 a barrel if you fancy storing some in your swimming pool.

[stuartmmcfc]

Can you get a barrel on amazon prime?

[JxJ Jr.]

bhstewie said:

Good easy to understand explanation (must be as I think I understood it!).

https://www.cnbc.com/2020/04/20/this-oil-price-cra...

I think this - "storage tanks quickly filling up" from that link might be quite an important bit. Storage capacity was filling up a week or two ago, I can't imagine that situation has improved since.

[Blue62]

pequod said:

20 years ago, I pulled a large plug from a multi-national E&P project as we couldn't make the economic case for further investment. The three case studies were based on a $/barrel scenario of 14/16/18 USD. That turned out to be a bad call but no one in the consortium believed we could achieve even $18 let alone the stratospheric rise since then.

There will be many projects scrambling for a way out of further commitments now and attempting to reduce costs to an absolute minimum, but that is a problem with most production facilities without total abandonment and complete loss of investment.

Good luck!

Fascinating stuff, where do you think this will end up?

[pequod]

Blue62 said:

pequod said:

20 years ago, I pulled a large plug from a multi-national E&P project as we couldn't make the economic case for further investment. The three case studies were based on a $/barrel scenario of 14/16/18 USD. That turned out to be a bad call but no one in the consortium believed we could achieve even $18 let alone the stratospheric rise since then.

There will be many projects scrambling for a way out of further commitments now and attempting to reduce costs to an absolute minimum, but that is a problem with most production facilities without total abandonment and complete loss of investment.

Good luck!

Fascinating stuff, where do you think this will end up?

Too early to call. Various scenarios will be in play and many will be based on a short term disruption with reduction of all unnecessary costs for a year or so. Medium and long term projections ... have a guess, it will take a ballsy investor to commit further ahead until we see where this pandemic is heading.

[Jonesy23]

The price of oil at -$37 (only 300% down) last time I looked is just an artifact of options due to expire, contracts demanding physical delivery, it's inland in the US and there's nowhere to store it in the region to take delivery. People are stuck trying to dump the contracts at any price.

Brent crude price is still positive, as are others. Depends where it is, what it is and when it's due to arrive.

Some Canadian oil went negative days ago.

[Steve7777]

What's the best way to invest in oil with some play money? USO ETF?

[Jonesy23]

Steve7777 said:

What's the best way to invest in oil with some play money? USO ETF?

You might make some money on USO right now, or you might just join the crowd who lost. Either puts or calls are still basically roulette in the current market. Big rewards possible, big losses also.

[ging84]

I can understand it going negative, to maybe -$0.5 or maybe -$5 in the extreme, but -$37, how
is there litterally going to be some places with massive water tanks saying, sure i'll empty a 100k barrels of water into the sea, and you can fill it up with oil and pay me $3.7m, and i'll sell it to Europe for $2m in a few weeks when someone can bring over a ship

[anonymous-user]

Do I get to keep the barrel too?