Oil plunges below zero for first time with May contract ending • Hacker News Board

Re: Oil plunges below zero for first time with May contract ending

#31

Post by DuskStar » Mon, Apr 20, 2020, 2:49 PM UTC

yur3i__ wrote: post #26

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

UAE and Saudi Arabia imo will be ok. They are trying to build themselves into big entertainment and tourism hubs with their ventures into sports and investment in tourism etc I think though they will definitely suffer they may be able to weather the storm. Kuwait and Qatar on the other hand I'm not so sure about

Saudi Arabia is trying to build tourism? From where?

Re: Oil plunges below zero for first time with May contract ending

#32

Post by nogabebop23 » Mon, Apr 20, 2020, 2:49 PM UTC

sz4kerto wrote: post #7

DevX101 wrote: post #2

Someone's going to find a creative way to store large amounts of oil and make a lot of money in a few years.

Nature has figured it out. (I.e.: the simplest way of storing oil is to not extract it.)

And there lies the rub - oil in-place is often in remote, hard-to-get areas; the margin will be made in having it ready to go when price warrants, not ready to extract

Re: Oil plunges below zero for first time with May contract ending

#33

Post by fmajid » Mon, Apr 20, 2020, 2:50 PM UTC

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

The gold bars are already in the US, as part of the Nixon-Faisal agreements. That should not be a comfort to the Saud kleptocracy, as the Shah of Iran discovered.

Re: Oil plunges below zero for first time with May contract ending

#34

Post by RobRivera » Mon, Apr 20, 2020, 2:50 PM UTC

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

This is a rather naived perspective on the strategic thinking and planning of the Saudi Royal family. They are heavy investors in renewable energy tech.

Re: Oil plunges below zero for first time with May contract ending

#35

Post by jdxcode » Mon, Apr 20, 2020, 2:50 PM UTC

fmajid wrote: post #33

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

The gold bars are already in the US, as part of the Nixon-Faisal agreements. That should not be a comfort to the Saud kleptocracy, as the Shah of Iran discovered.

technically wasn't the ayatollah that had to pay that price?

You're talking about https://en.wikipedia.org/wiki/Iranian_frozen_assets right?

Re: Oil plunges below zero for first time with May contract ending

#36

Post by kaybe » Mon, Apr 20, 2020, 2:51 PM UTC

yur3i__ wrote: post #26

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

UAE and Saudi Arabia imo will be ok. They are trying to build themselves into big entertainment and tourism hubs with their ventures into sports and investment in tourism etc I think though they will definitely suffer they may be able to weather the storm. Kuwait and Qatar on the other hand I'm not so sure about

Probably. I have to say though, their advertisements for tourists were a bit.. out there. 50°C+ outside? Come visit us, you can hang out in the AC mall, or go skiing in our fantastic artificial ski hall (all powered by fossil energy of course). Yeah.. no thanks. It's hard for me to imagine that they can keep up with this level of income with just tourism.

Re: Oil plunges below zero for first time with May contract ending

#37

Post by toomuchtodo » Mon, Apr 20, 2020, 2:51 PM UTC

drcode wrote: post #27

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

This seems unlikely to me, given the low extraction costs they have for oil. I guess the biggest danger they would face is if they have to stop "paying off" their population, and this leads to an "arab spring" type of situation. But it seems even in that case they would unfortunately have the will and resources to use Syria-style brutal tactics to contain any uprising.

Saudi Arabia’s extraction costs are about $3/barrel, their nation state budget require $80/barrel to break even.

They are burning through reserves at these market prices.

Edit: To your point, it’s going to get ugly locally if market conditions persist.

Re: Oil plunges below zero for first time with May contract ending

#38

Post by nogabebop23 » Mon, Apr 20, 2020, 2:51 PM UTC

turbinerneiter wrote: post #5

recursive wrote: post #4

Earlier quoted context omitted.

And what would that argument be?

I think gas goes bad after some months, not sure if crude degrades as well.

The knock-on price is to refined gas, but when we talk price/storage of oil that's not ready to put in your car gasoline.

Re: Oil plunges below zero for first time with May contract ending

#39

Post by pjc50 » Mon, Apr 20, 2020, 2:51 PM UTC

DuskStar wrote: post #31

yur3i__ wrote: post #26

Earlier quoted context omitted.

UAE and Saudi Arabia imo will be ok. They are trying to build themselves into big entertainment and tourism hubs with their ventures into sports and investment in tourism etc I think though they will definitely suffer they may be able to weather the storm. Kuwait and Qatar on the other hand I'm not so sure about

Saudi Arabia is trying to build tourism? From where?

Dubai is definitely a tourist destination for a small number of hyper-wealthy people. The tourists get to be in the part of the bubble that serves alcohol.

Re: Oil plunges below zero for first time with May contract ending

#40

Post by jimbob45 » Mon, Apr 20, 2020, 2:51 PM UTC

yur3i__ wrote: post #26

bob33212 wrote: post #20

What happens when Saudi Arabia collapses? Does the royalty get the fuck out of town on their private jets with as many gold bars as they can carry?

UAE and Saudi Arabia imo will be ok. They are trying to build themselves into big entertainment and tourism hubs with their ventures into sports and investment in tourism etc I think though they will definitely suffer they may be able to weather the storm. Kuwait and Qatar on the other hand I'm not so sure about

I haven't done much research but that's pretty funny if you're correct. The middle east has done their darndest trying to make sure women feel as unwelcome as possible in their domain. Gonna be tough to establish a tourism industry when you've alienated half the world's population (this isn't even a commentary on women's rights - you simply can't alienate half your customer base and think it's not going to affect you).