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Oil crashes 305% to -$36.73 a barrel

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Posted By: MDConservative, 4/21/2020 9:40:26 AM

U.S. oil prices plummeted in historic fashion Monday, crashing below zero as traders unloaded positions ahead of the May contract's Tuesday expiration. West Texas Intermediate crude oil futures for May delivery cratered by 305 percent to -$36.73 a barrel. At a price below zero, buyers would be paid to take delivery as there are costs associated with transportation and storage.

Comments:

Not long ago there was general scoffing at the idea that the price of oil could go negative. And today, here it is. The country is awash in oil. The world is awash with the stuff. Still want to drill, baby, drill? Under these circumstances the government could just "buy" the excess filling the strategic reserve and make a few bucks in the process.

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Reply 1 - Posted by: franq 4/21/2020 9:45:33 AM (No. 386386)
Has to be fake news. When I was in high school in the 70's, the experts said all the oil would be gone by 1995.
10 people like this.

Reply 2 - Posted by: Jethro bo 4/21/2020 10:19:22 AM (No. 386430)
Kneepad Media headlines. US oil and gas business craters. Democrats, Putin, China and Arab countries celecbrate. Trump to blame!
2 people like this.

Reply 3 - Posted by: Mushroom 4/21/2020 10:36:00 AM (No. 386461)
Considering in my area that Diesel has dropped $.30 while gas, $1.30 seems to me there is quite the margin on diesel right now. I'm not going to worry about middlemen, those nests are feathers. Actual producers? Individuals and well financed companies will be hurt, but isn't Oil producing a feast/famine job?
2 people like this.

Reply 4 - Posted by: mc squared 4/21/2020 10:46:18 AM (No. 386468)
Is it possible that in some states/cities the taxes may be higher than the cost of the product?
3 people like this.

Reply 5 - Posted by: Clinger 4/21/2020 10:51:43 AM (No. 386478)
We haven't grasped the significance of the price drop here in Illinois because of the temporary tax we placed on gas in 200? which at the time was the largest increase until we again doubled it in 2019. When they said it was temporary we didn't think they meant temporary until it increased even more! I did write my state senator who I went to high school with and called out his BS.
2 people like this.

Reply 6 - Posted by: TXknitter 4/21/2020 10:59:03 AM (No. 386490)
OP, our President already on that idea. Trump lets no grass grow under his feet. He said yesterday the strategic reserve would be (or has been) filled up right away.
2 people like this.

Reply 7 - Posted by: hershey 4/21/2020 11:01:59 AM (No. 386495)
So the stations are going to pay you for the gas you get??? B.S....local gas is over $2 per gallon per http://www.gaspricewatch.com/IN-indiana But I feel like a teenager again...gas is cheap and I"m grounded....lol
7 people like this.

Reply 8 - Posted by: Anti_democRAT 4/21/2020 11:05:05 AM (No. 386502)
there have been many bad actors during this crisis. naming a few china, saudi arabia, democrats most notably pelosi/schumer, some fachistic governors, and the media. some of the fachistic governors may just be stupid (inslee for example)
3 people like this.

Reply 9 - Posted by: HPmatt 4/21/2020 11:08:27 AM (No. 386509)
Fake news. Click bait. This was due to May Option contracts expiring yesterday. If you could not roll over, you have to take DELIVERY.... hot potatoe(Dan Q)....Storage is full to the gills, so no place to store it. $14.50 today.
4 people like this.

Reply 10 - Posted by: PChristopher 4/21/2020 11:16:46 AM (No. 386526)
So when I fill up this week, they should pay me? Yeah....like that'll happen. It would be amusing if they went back to giving away glasses and sets of dishes like back in the day.
2 people like this.

Reply 11 - Posted by: HotRod 4/21/2020 11:38:03 AM (No. 386571)
Maybe we will have gas price wars, like we used to have. Gas at 12 or 15 cents per gallon.
2 people like this.

Reply 12 - Posted by: DVC 4/21/2020 11:38:16 AM (No. 386572)
When oil is being pumped at some given rate, and then the usage drops way, way down, it starts going to storage, because none of the producers wants to shut off their taps....which are money taps, cash flow. Russia desperately needs the oil revenue, very unwilling to stop pumping....same for Saudis, and Iran, and Nigeria, and other places. So, more oil than needed, going to storage. Then the storage tanks are full. So they rent a tanker, until all the tankers are full and at anchor because nobody is buying. Oil flowing....no place to put the excess beyond the low current usage. So - "How much will you give me for this oil?" "I can't buy any more." " I'll give you a heck of a discount." "I can't buy any more." "I gotta sell this, or I get shot." "I can't buy any more, no place to put it." " I'm desperate, Putin says I HAVE TO SELL IT, Russia has bills to pay." "I can't buy any more!" For Russia, oil sales is pretty much what funds the entire country. Nobody wants to buy very much that they manufacture, pretty much only raw materials, oil, gas, steel, gold, platinum. I saw barges filled with raw logs, delimbed but bark still on, in the Amur River in far eastern Russia, waiting for Japanese ships to pick them up for milling in Japan. They will eventually work through this supply glut, and it will be hard on US oil production companies, no doubt. Small drillers and folks who support them will go out of business, which has happened many times before, a VERY cyclical business. This, too, shall pass. Gas should be cheaper than it is. Still stuck at $1.32 here in the country west of KC.
2 people like this.

Reply 13 - Posted by: Safari Man 4/21/2020 11:43:58 AM (No. 386584)
I bought 1 million barrels for a handy $36 million payout. When they show up with the delivery, I just won’t answer the door. Nobody home but us covid-ravaged Chickens.
5 people like this.

Reply 14 - Posted by: Strike3 4/21/2020 12:58:22 PM (No. 386665)
I have room in my backyard for a few hundred barrels, bring it on over. No personal checks please.
0 people like this.

Reply 15 - Posted by: bad-hair 4/21/2020 1:00:31 PM (No. 386670)
Retired from the exploration industry. Apparently we found too much. PS minus 36 a barrel ? And I thought airline accounting was weird.
3 people like this.

Reply 16 - Posted by: JediJerry 4/21/2020 5:54:51 PM (No. 386972)
Why is gas still $2.50/gallon? It is where i live.
1 person likes this.

Reply 17 - Posted by: DVC 4/21/2020 9:41:33 PM (No. 387154)
#16, your state's fault, almost certainly. $1.32 in east KS, I see under $1.00 south of Louisville, $1.14 in Paducah. $1.22 in Jackson, Mississippi. Low tax states without looney state EPAs
1 person likes this.

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