Seriously?
- posted
3 years ago
Seriously?
Lower prices at the pumps?
I don't know how that works in the USA, but over here whenever the prices of crude oil rise we see higher prices at the pumps very soon, but when the prices fall nothing happens "because we still have to sell the stock bought at the higher price" or similar...
Gas was $1.93 at the local station near the Rhode Island border this morning buy I haven't traded my EV for a Hummer, yet. also, it runs on gas too.
Same story here, but if it stays there too long there won't be any replacement oil when the old stock is gone... :-(
There is so little demand they are chartering tankers as floating storage tanks.
"Supertankers drafted in to store glut of crude oil Ships able to carry 2m barrels chartered for $335,000 a day to store oil unwanted during the Covid-19 pandemic"
or
"The last major period of global oil oversupply was 2014-16, during which global inventories built up by about 1.1 billion bbls, or an average of one million barrels per day (MMb/d). IHS Markit expects the current period of oversupply to build a larger volume of oil in a matter of months. In 2014-16, it is estimated that a maximum of 120 million barrels (MMbbl) of oil was put into floating storage - which means oil stored on ships with no booked delivery destination. This time, floating storage will fill more rapidly to relieve the pressure cooker of bulging onshore oil inventories."
It is supply and demand everywhere. When oil prices go down, it only impac ts the pump price as the supply of gasoline goes up. A lower oil price doe s not have to result in more production of gasoline. The gas companies hav e to decide to ramp up production. They don't have to do that right away. Eventually one of them gets a bit greedier than the others and starts maki ng more gas which starts the price lowering.
I see gas going for $1.25 around here. I think the oil price drops are rea ching the pumps.
The price of oil being negative in some market, somewhere means oil produce rs have not cut back yet and are paying to store some portion of their prod uction. But rest assured, the oil companies buying the oil production are still paying for it.
-- Rick C. - Get 1,000 miles of free Supercharging
If Trump had any balls, he would use the DPA to order GM to build oil tankers to store the excess oil!
Or we could buy some to go with the millions of barrels we have shoved into the ground in the strategic oil reserve. But that's probably already full. :(
It's like shrimp prices going below $5 a pound for 16 count and your freezer is already full.
-- Rick C. + Get 1,000 miles of free Supercharging
es
kacts the pump price as the supply of gasoline goes up. A lower oil price d oes not have to result in more production of gasoline. The gas companies h ave to decide to ramp up production. They don't have to do that right away . Eventually one of them gets a bit greedier than the others and starts ma king more gas which starts the price lowering.
eaching the pumps.
cers have not cut back yet and are paying to store some portion of their pr oduction. But rest assured, the oil companies buying the oil production ar e still paying for it.
yeh, it is oil futures that are negative, those who bet on oil prices risin g are desperate to get rid of them because otherwise they will have to take delivery, that's going to be messy if you sit in an office
snipped-for-privacy@columbus.rr.com wrote in news:00926a81-e8c7-4345-a4fa- snipped-for-privacy@googlegroups.com:
-36 It means they will pay you to come take it off their hands, but you must actually take delivery.
Apparently people made binding contracts, futures or something, to buy and sell oil, and have to trade now, even if it means paying people instead of getting paid to deliver oil. That same thing happens in electricity markets. Sometimes California pays other states to take excess solar electricity off our hands.
-- John Larkin Highland Technology, Inc Science teaches us to doubt.
You have to be careful if it goes negative - if you forget and pay them, they'd have to suck it out of your car.
-- Cheers Clive
So you do not yet get free gas and a free hamburger?
One great proposal is to store crude oil in empty WeWork spaces.
-- John Larkin Highland Technology, Inc picosecond timing precision measurement
Well it's already in barrels and there are plenty of closed pubs over here...
-- Cheers Clive
Not necessary. It's a contract to take oil away from Cushing (or similar place). Barrels and/or tankers not included. Right now, barrels cost more than crude oil, so negative price for oil.
Speculating in commodity futures is like that. If you're not for real, you have to liquidate your position or take delivery.
I recall a sitcom episode from the '60s where somebody had several tons of pork bellies delivered to his front lawn ;)
Cheers
Phil Hobbs
-- Dr Philip C D Hobbs Principal Consultant
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