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Oil prices could fall below zero:

Original Article

Posted By: MDConservative, 3/18/2020 12:14:45 PM

Plunging oil prices could be headed a lot lower – possibly below zero, according to one Wall Street analyst. West Texas Intermediate crude oil, the U.S. benchmark, fell by more than 10 percent Wednesday to near $24 a barrel, a level last seen in April 2002. “Oil prices can go negative,” wrote Paul Sankey, managing director at Mizuho Securities.


The cost of production, transportation and storage are close to making oil too expensive to hold, thus the "negative value". The world is awash in oil; the flood getting deeper. Drill, baby, drill! On your dime...go ahead.

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Reply 1 - Posted by: iSpartacus 3/18/2020 12:16:31 PM (No. 349981)
3 people like this.

Reply 2 - Posted by: chance_232 3/18/2020 12:23:55 PM (No. 349988)
What happened to those endless predictions that oil would have run out by now.] Whatever will the governments do with sales tax dropping? And for the good news....... its much harder for the warmists to make a case for solar and wind with a glut of cheap oil out there. Look for SUV sales to surge.
12 people like this.

Reply 3 - Posted by: planetgeo 3/18/2020 12:29:11 PM (No. 349995)
"Below zero", eh? Excellent. I can't wait to have Chevron pay me to use their gas.
21 people like this.

Reply 4 - Posted by: Strike3 3/18/2020 12:42:01 PM (No. 350010)
Screw Fox. Their fearmongering has been worse than the other Fake News. There was no reason to mention Trump in relation to the panic in the market. I will never tune in again.
20 people like this.

Reply 5 - Posted by: texaspast 3/18/2020 12:48:04 PM (No. 350015)
This seems to have been written by someone who only knows about oil markets, not production. There is hardly any 'cost of storage' of oil. If it goes too low, you just leave it in the ground or produce only so much as is necessary to keep the O&G lease alive. The oil and gas industry is by its very nature a boom-and-bust business. Production from wells decreases over time. Price of oil goes up. Eventually it becomes profitable to drill again. Even with drilling going on, it takes a while for production to catch up to demand to lower prices. So more wells are drilled. Then the point is reached where production capacity exceeds demand, prices go down - and when prices fall, they do so quickly. There's your bust. It will be back.
17 people like this.

Reply 6 - Posted by: h24015 3/18/2020 12:50:21 PM (No. 350020)
I appreciate the way gas prices skyrocket instantly if there's a sniff that oil may climb a $1. Barrel of oil drops $20, price per gallon sure seems to defy gravity. Must be a quantum physics thing.
10 people like this.

Reply 7 - Posted by: bad-hair 3/18/2020 12:50:42 PM (No. 350021)
Cool I'm buying as many 1000 gallon gas tanks as I can get my hands on. I think Warren Buffet et al are ordering ne rail cars.
1 person likes this.

Reply 8 - Posted by: hurricanegirl 3/18/2020 12:53:22 PM (No. 350026)
And there went the stock market!
1 person likes this.

Reply 9 - Posted by: rockeysroomie 3/18/2020 12:55:15 PM (No. 350027)
Time to buy a Volt? Ha ha.
2 people like this.

Reply 10 - Posted by: PChristopher 3/18/2020 1:08:07 PM (No. 350040)
But, somehow, it will still be $3 a gallon or more
5 people like this.

Reply 11 - Posted by: DVC 3/18/2020 1:12:24 PM (No. 350046)
Below zero? I call BS. Not going to happen.
7 people like this.

Reply 12 - Posted by: bad-hair 3/18/2020 1:17:02 PM (No. 350048)
Said Wall Street Analyst Paul Sankey should have gone home after lunch and slept it off instead of making his employer look like an idiot. The boy's got a glowing future as an NYC swivel servant.
4 people like this.

Reply 13 - Posted by: Periwinkel 3/18/2020 1:29:48 PM (No. 350060)
If this is true and our energy companies go broke, we can thank the Saudis and the Russians...neither one is a friend of the US
5 people like this.

Reply 14 - Posted by: Proud Texan 3/18/2020 1:38:34 PM (No. 350073)
Wall Street Analyst Paul Sankey must be making a ton of money selling short on oil stocks. These types of articles are a great way for such scum to manipulate the market.
2 people like this.

Reply 15 - Posted by: Delilah 3/18/2020 2:06:01 PM (No. 350102)
I saw gas for $1.46 this morning and realized the market had gone down, down, down.
1 person likes this.

Reply 16 - Posted by: mobyclik 3/18/2020 2:27:25 PM (No. 350124)
Drove by my local Sunoco this morning here in Florida: $2.07. Week ago it was $2.39.
1 person likes this.

Reply 17 - Posted by: kono 3/18/2020 2:49:47 PM (No. 350139)
“Oil prices can go negative,” wrote Paul Sankey, managing director at Mizuho Securities. Another shining example of why browsing headlines can disconnect you from reality. There's a major difference between saying something can happen and saying it could happen. Both imply it's possible (i.e not forbidden by the laws of time and space), but the latter implies there's a non-zero probability that it will happen.
2 people like this.

Reply 18 - Posted by: dst4life 3/18/2020 3:35:50 PM (No. 350160)
Someone at the Onion has infiltrated Fox. Does this mean when we go buy gasoline we won't be charged? Or perhaps the more gasoline we buy the bigger that "stimulus check" will be. The mind reels.
2 people like this.

Reply 19 - Posted by: DVC 3/18/2020 3:36:33 PM (No. 350161)
Local gas is $1.78 or $1.79 at some of our more competitive stations already. If it "goes below zero" I'll stop by every few days and pick up some cash and gas. /s off This is just total malarkey.
3 people like this.

Reply 20 - Posted by: MDConservative 3/18/2020 4:56:34 PM (No. 350219)
It is apparent many have not read the article whatever. The concept isn't difficult to grasp...if a good has no buyers due to oversupply, the good must be stored (added costs) or otherwise disposed (cut losses). You hold a barrel of oil for which you paid $18. The market price has collapsed to $10. What are you going to do with that barrel? Store it at further cost to yourself hoping for a price gain? Or sell for a considerable loss, i.e. negative value? How much more oil are you apt to buy under these conditions? How much more would you produce from your wells where a barrel costs you $30? Let's not forget, the Saudis and Russians can produce massive amounts and bring it to market at prices American producers cannot come close to matching. Other major producers can play along. What will this do to the US export market? We've bought foreign oil before in greater quantities...because it was cheaper than American-produced crude and not seen as an environmental threat. It can happen again.
0 people like this.

Reply 21 - Posted by: DVC 3/18/2020 5:12:40 PM (No. 350238)
Yes, all true, and all unsurprising. As to the "negative value", perhaps BELOW COST might be construded as 'negative value', but they will not get to where they are paying someone to take it away. As far as importing oil, no problem, as long as we have our wells there to prevent the Saudis from holding us hostage again like they did in the .70s, when our genius leaders were talking about "peak oil" and "the planet will soon run out", which was pure BS then and still is.
4 people like this.

Reply 22 - Posted by: Historybuff 3/18/2020 5:13:27 PM (No. 350239)
Since Exxon/Mobil, Shell Etc. are not manufacturing oil, only buying it on the open market, that's just fine. The make nine to twelve cents per gallon if oil is $23. per barrel or $110. per barrel. As far as not drilling domestic oil? If ya leave it in the ground it don't spoil! Oil is a commodity. It goes up, it goes down. Nice to have that socked away until the next time there is a cut off from crazyland in the middle east.
1 person likes this.

Reply 23 - Posted by: red1066 3/18/2020 5:24:02 PM (No. 350256)
Well with everything closed, and nothing to do but watch the same home improvement shows over and over again, one might as well go for a drive just to get out of the house.
2 people like this.

Reply 24 - Posted by: Sandbar 3/18/2020 5:28:09 PM (No. 350258)
$1.55 here in Indy and a major brand. #5 is on the mark. Having grown up in an oil field, I've seen many cycles when producers just cap the wells and wait. It doesn't take much to start pumping again when the price is right.
2 people like this.

Reply 25 - Posted by: rikkitikki 3/18/2020 7:19:51 PM (No. 350364)
Last month in Houston, the pump price of $2.10/gal included $0.80/gal in taxes...half State, half Federal. I don't really expect either agency from giving up its 'take.'
1 person likes this.

Reply 26 - Posted by: Venturer 3/18/2020 8:28:14 PM (No. 350399)
The prics hasn't gone down in my l;ocal stations.
0 people like this.

Reply 27 - Posted by: Muguy 3/19/2020 7:36:51 AM (No. 350686)
Boom & Bust. This is the legacy of the oil industry. Oil will never be 'negative' because they will simply stop producing so much until prices rise again. the glut of cheap foreign oil due to the U.S. producing OUR OWN oil is causing this, and the workers in the oil field will be out of work again as we have backed off drilling for a time. We drilled here, we drilled now, and we pay less. There are always consequences and little equilibrium about it. Boom & Bust.
0 people like this.

Reply 28 - Posted by: JackBurton 3/19/2020 11:08:22 AM (No. 350935)
0 people like this.

Reply 29 - Posted by: JackBurton 3/19/2020 11:59:24 AM (No. 350994)
Just got back from Costco. $1.559
0 people like this.

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