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Oil down 52%


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21 minutes ago, spin_dry said:

Between being over leveraged and now this, oil shale companies are toast. 

Oil has never been a free market commodity. Now they are dying by their own sword. Boo fucking hoo

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17 minutes ago, XCR1250 said:

Pretty soon Gas Stations will be giving out free glasses and mugs again just like they all did years ago.

Air, piss and maps use to be free.. not no more 

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7 minutes ago, Pete said:

Air, piss and maps use to be free.. not no more 

gas stations used to be able to make money on fuel.  Now it's off the convenience store making money and the gas is to bring them in.  The only non convenience store stations are the handful of ones attached to a mechanics bay which is making money and those are dying off quick.  think we lost 3-4 around here in the last 2 years.  

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MARKETS

This oil price crash isn’t as bad as it seems — here’s why

PUBLISHED MON, APR 20 20202:19 PM EDTUPDATED 9 MIN AGO
KEY POINTS
  • Something that’s never happened in the oil market just occurred: negative prices on an oil contract.
  • While many people may see this and think the overall price of oil is negative, there’s nuance.
  • The picture in the market is not as bleak as this eye-popping headline would suggest.
106497213-200420plcurrieshort.jpg?v=1587406213&w=750&h=422
 
 
WATCH NOW
VIDEO03:08
Likely to see lower oil supplies until at least mid-May: Goldman’s Currie
 

Something that’s never happened in the oil market is happening today: negative prices on an oil contract.

While many people may see this and think the overall price of oil is negative, there’s nuance. The short answer is that no, not all oil is free.

 

The picture in the market is not as bleak as this eye-popping headline would suggest.

Futures contracts are tied to a specific delivery date. Toward the end of a contract’s expiration date, the price typically converges with the physical price of oil as the final buyers of these contracts are entities like refineries or airlines that are going to take actual physical delivery of the oil. 

Futures contracts ultimately are contracts for physical delivery of the underlying commodity or security. While some people in the market speculate on the contracts, others are buying and selling because they have use for the commodity itself. Near the contract’s expiration, traders just start buying the next month’s futures contract. Those who stay in the position to the final day are typically buying the physical commodity, such as a refiner.

The West Texas Intermediate crude contract that fell more than 100% on Monday is for May delivery, and it expires Tuesday. With the coronavirus pandemic leading to unprecedented demand loss, and with storage tanks quickly filling up, there is no demand for this oil contract expiring Tuesday. 

That’s why it turned negative, meaning producers would pay to get this oil off their hands because there is no one that needs that crude this week with the country shutdown.

 

Futures contracts trade by the month. The contract for June delivery was 16% lower at $21.04 per barrel.

So after the May contract expires on Tuesday, oil will be back above $20.

106497295-200420plkilduff.jpg?v=1587409213&w=750&h=422
 
 
WATCH NOW
VIDEO02:20
Crude closing negative means a mega glut that won’t clear soon: Kilduff
 

The U.S. Oil Fund, which tracks the price of various oil futures contracts, fell just 10%.

Trading volume was also relatively thin in the May contract. According to data from the CME Group, volume stood at roughly 126,400. By comparison volume for the June contract was nearly 800,000.

John Kilduff of Again Capital attributed the plunge in the May contract to the fact that “the physical oil market conditions are a disaster, with growing concerns about finding available storage.”

Longer term, he said the picture looks brighter.

“The higher priced, longer-dated futures contracts are indicative of the market expecting some level of clearing in the cash market over the course of the next several months,” he told CNBC. “Given the rapid decline in the U.S. oil rig count and the expected cutback by OPEC+ members that is a reasonable assumption.”

That said, he noted that as the subsequent contracts reach expiration, they could engage in their own “death march down towards the super-low cash prices.”

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world

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1 hour ago, XCR1250 said:

Pretty soon Gas Stations will be giving out free glasses and mugs again just like they all did years ago.

Yup and washing your windows, filling your tank and checking your oil.

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4 hours ago, XCR1250 said:

Pretty soon Gas Stations will be giving out free glasses and mugs again just like they all did years ago.

I remember yrs ago seeing a hustler cartoon that said " Gee , I remember back during the gas crisis we couldn't even get you guys to clean the windshield. and the cartoon was the attendant blowing the customer.

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8 minutes ago, steve from amherst said:

I remember yrs ago seeing a hustler cartoon that said " Gee , I remember back during the gas crisis we couldn't even get you guys to clean the windshield. and the cartoon was the attendant blowing the customer.

My favorite hustler cartoon had a kid turning green from drinking drain cleaner, the father read it, says induce vomiting if swallowed, quick Martha show him your pussy.

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  • Trying to pay the bills, lol



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