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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (156769)

4/20/2020 7:55:56 AM

From: TobagoJack

Read Replies (3) | Respond to of 218083

RE <<oil is a supersonic bargain at $20>>

... which galaxy do you live in? :0)
... oil just went hypersonic

bloomberg.com

Oil in New York Plunges Below $15 as Storage Sites Fill

Elizabeth Low

Oil plunged below $15 a barrel in New York, a fresh 21-year low, as inventories soar because of the supply-demand mismatch that’s been created by the coronavirus.

The most immediate West Texas Intermediate contract fell as much as 22% to $14.19 a barrel. While a major part of the slump is because the May futures contract expires on Tuesday, the collapse nonetheless reflects a fast-growing glut of oil, and rapidly expanding stockpiles in Cushing, Oklahoma, the American pricing hub.

See also: Wild Oil Market Set for Extra Volatility as Contract Expiry Near

As WTI futures have tumbled, it has opened up a discount of almost $9 a barrel to the June contract, to which most trading has now transferred. Buyers in Texas are offering as little as $2 a barrel for some oil streams, raising the possibility that American producers may soon have to pay customers to take crude off their hands, particularly as landlocked producers struggle to find homes for their oil.

Crude stockpiles at Cushing, Oklahoma -- the key U.S. storage hub -- have jumped 48% to almost 55 million barrels since the end of February, Energy Information Administration data show. The hub had working storage capacity of 76 million as of Sept. 30, according to the EIA.

The 9.7 million barrels a day of production cuts agreed by OPEC+ are paling in comparison against this backdrop. China reported its first economic contraction in decades on Friday, an indication of what’s to come in other major economies that have yet to emerge from coronavirus-driven lockdowns. There were some signs of optimism, however, as death rates eased in New York and some of the hardest-hit European countries.

“There is no limit to the downside to prices when inventories and pipelines are full,” hedge fund manager Pierre Andurand tweeted. “Negative prices are possible. I am not saying it will happen. If it does it would be very short lived.”

Prices:

WTI for May plummeted 22% to $14.24 a barrel as of 9:33 a.m. in London after falling 20% last weekThe June contact declined 7.1% to $23.25Brent for June fell 3.8% to $26.99 a barrel

Despite the weakness in headline prices, retail investors are plowing money back into the oil space. The U.S. Oil Fund ETF saw record inflows of $552 million on Friday, taking total inflows last week to $1.6 billion. The fund said last week it would move some of its WTI holdings into the July contract, citing regulatory and market conditions.

The price collapse is reverberating across the oil industry. Crude explorers shut down 13% of the U.S. drilling fleet last week as the swelling worldwide glut of crude spurred drastic cost-cutting and project cancellations among drillers.

“U.S. shut-ins are gaining pace, but not fast enough to avoid storage filling to max,” said Paul Horsnell, head of commodities at Standard Chartered.

More oil-market news

The son of the legendary founder of Hin Leong said the Singapore oil trader hid about $800 million in losses racked up in futures trading, suggesting a much bigger hole in the company’s finances than thought, according to people with knowledge of the matter. Hedge funds were wrong again after betting for a second straight week that oil’s spectacular crash had bottomed out. A Nigerian oil-industry union called off plans for a strike that threatened the country’s crude exports, after authorities released workers accused of breaking rules aimed at containing the coronavirus. Mexico’s Pemex has too much gasoline and nowhere to store it, potentially racking up significant ship fees as demand wanes because of the fast-spreading coronavirus.

To: Maurice Winn who wrote (156769)	4/20/2020 10:24:15 AM
From: carranza2	2 Recommendations Recommended By marcher Secret_Agent_Man Read Replies (4) \| Respond to of 218083

Unlike gold, oil’s value derives from its usefulness as a producer of energy, etc. If there is little demand, a good supply of it is sitting idle in ships, the prospects for its use are dim, and the idiots continue to pump, it is overpriced at $11 because it’s present usefulness is very low. I suspect that it will go into mid-single digits.

To: Maurice Winn who wrote (156769)	4/20/2020 10:30:24 AM
From: Follies	1 Recommendation Recommended By Secret_Agent_Man Read Replies (1) \| Respond to of 218083

As you know, gold is made from oil, so the price of oil precedes the price of gold Gold can’t be made when mines are closed, but more importantly mines only produce a marginal amount of gold. The price of gold is determined by the demand on the existing above ground mined and refined gold. That demand today is based on the need to find an alternative to fiat. As faith in fiat drops, demand increases. That’s where we are today, but that can change so we watch and wait.