WTI $10 a barrel, how low can it go?

Oil will be the first thing to crumble, then watch the STAWK MARKET close behind.

I was saying oil at 5$/bbl a few months ago.

Gas will be I predict 35 cents a gallon within six months.
 
Most stations in my area still charging $1.49 for 87 octane. Been looking at new suv's and durn near all of them are turbo's that require premium.
That's ok at todays prices, but a couple or three years down the road, may not be so good.
 
Went down to -$20. Yes negative twenty a barrel. [censored]
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Starting to come up... down... something now from the -20.
 
Not good. A stable $40 a bbl keeps everyone working and a reasonable pump price. This keeps up we may need another world War to spin the economies back up.
 
Yep. Negative. On paper, you have to pay someone to take it. It means shut-ins. Lost jobs. Very shortly the USA will not be an exporter and shortly after that will be a net importer again. Not sure if the banks will ever support Permian Basin drilling again. Everyone will get a "Covid Haircut" in more ways than one.
 
Originally Posted by mightymousetech
Originally Posted by Mr Nice
Expect a crazy amount of layoffs in this industry.

Low gas prices are good for consumers, very bad if you're employed in this industry.



Will be very good for airline stocks.


On the surface, you would think so, but with revenue down 95%, and only 30% of the cost of running an airline being fuel, it's not going to do much to stop the hemorrhage of cash ($100 million/day for each of the big airlines...that's EACH...take a $45 Billlion/year company like Delta or Southwest, now take away nearly all of the revenue...and keep most of the costs...it's some ugly arithmetic).

When things like aircraft leases, gate leases, and employees are 65% of costs, and they're basically fixed costs (though employees are working reduced hours, so the cost is down a bit) the cash burn isn't decreased much by lower fuel costs.

They're flying anywhere from 20 - 40% of their normal flights, too, so the fuel burned isn't nearly as much as usual...and the savings aren't as much as they could be either...

When the traffic comes back (which I hope to be this year, and not much longer) then the fuel burn will go up and lower prices for fuel will help the airlines manage cost.

Unfortunately, the traffic coming back will be the result of a return to of economic normalcy, and I expect oil prices will lead, not lag, that return...
 
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Originally Posted by Rmay635703
-$35 apparently, US should refill it's reserve


That's the issue, though, isn't it?

There's no storage left, so the delivery contracts go negative because nobody has any room left to store the oil on which they will take delivery....
 
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When people say we shouldn't tweak the stay at home, non-essential stuff, they don't realize what is coming down the pike. It won't stop at oil but hit most non-food and non-utility businesses as well. We need to think smart and use our heads and not just our hearts. Use a rifle shot approach and not shot gun.
 
One bad thing with everyone staying home is from what our new has reported. North Carolina's D.O.T. is hurting because nobody is buying fuel and they are not getting the tax off it.
 
Originally Posted by Astro14
Originally Posted by Rmay635703
-$35 apparently, US should refill it's reserve


That's the issue, though, isn't it?

There's no storage left, so the delivery contracts go negative because nobody has any room left to store the oil on which they will take delivery....


Strategic reserve was falling in January- March, unless something dramatic is going on under the table I would say the US government isn't full.

https://www.eia.gov/dnav/pet/pet_stoc_typ_d_nus_SAS_mbbl_m.htm

https://www.spr.doe.gov/dir/dir.html
 
Originally Posted by Snagglefoot
The traders on the Chicago mercantile establish the price. If someone wants to take the risk to make it go to zero. It will go to zero. Traders got to trade.
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Yeah, I'm sure these traders planned to have to cough up money to get out of the contracts they held.
Basic microeconomics trumps these traders every day of the week.
I know that I feel badly for them.
NOT!
 
I've seen wheeling and dealing with negative priced natural gas in Canada. Producers were trying to get rig of the natural gas while keeping the condensate. A company with hedged natural gas was taking advantage to the negative gas contracts to be paid to take the gas and immediately sell it at their higher hedged price.
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I work on engines used in oil and gas at a CAT dealership....they sent us home early today and said "32hr weeks until further notice." It's hitting home for me....
 
Yeah … 3516 compressor packages are common here … I'm sure our dealership will feel that and heavy equipment slowing down …
 
Originally Posted by Snagglefoot
I've seen wheeling and dealing with negative priced natural gas in Canada. Producers were trying to get rig of the natural gas while keeping the condensate. A company with hedged natural gas was taking advantage to the negative gas contracts to be paid to take the gas and immediately sell it at their higher hedged price.
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That wouldn't be unusual since they want the liquid and they don't want the gas, particularly if there's no ready pipeline capacity to transport it to where it would have some value.
You see this in the US as well, with drillers wanting to flare the gas since they have no ready market for it.
That natural gas prices have been bargain basement for years now is certainly a factor.
 
Originally Posted by tomcruise
I work on engines used in oil and gas at a CAT dealership....they sent us home early today and said "32hr weeks until further notice." It's hitting home for me....

Most people don't think of what it takes to "feed" industries.
 
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