Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Oil plunges below zero for first time with May contract ending

bloomberg.com

Post reply on HN
Print view View original

171–180 of 546 posts

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

#171

Post by nugget »

bdcravens wrote: post #163
nopinsight wrote: post #149

If the pandemic lasts longer than 6 months, which is quite likely, many high-cost oil producers might not survive. Some would argue this could lead to shortage and a much higher price later on, but long-term oil demand could also be affected. There might be some semi-permanent change in people's behaviors if the epidemic continues for many months. Many people will form a habit of doing more things at home/online: mor…

You'll also see the economy in the fourth largest city in the US - Houston - collapse. It's not just the large energy companies here, but the entire ecosystem of companies that support the energy industry here.

Are there any signs of this starting to happen given how low prices have gone?

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

#172

Post by yingw787 »

koheripbal wrote: post #161
yingw787 wrote: post #73

Earlier quoted context omitted.

I pay more for a Chipotle burrito (with guac of course, can't live without guac). This is incredible.

... but you don't have a barrel to put it in, do you?

No barrel needed, I just eat it when it's hot and fresh

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

#173

Post by sixQuarks »

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.

Empty Oil tankers. They are charging over $300,000 per day for storage now. Some think this is the greatest trading opportunity in over a decade.

https://adventuresincapitalism.com/2020/03/19/crude-contango...

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

#174

Post by ardy42 »

nopinsight wrote: post #149

If the pandemic lasts longer than 6 months, which is quite likely, many high-cost oil producers might not survive. Some would argue this could lead to shortage and a much higher price later on, but long-term oil demand could also be affected. There might be some semi-permanent change in people's behaviors if the epidemic continues for many months. Many people will form a habit of doing more things at home/online: mor…

> If the pandemic lasts longer than 6 months, which is quite likely, many high-cost oil producers might not survive. Some would argue this could lead to shortage and a much higher price later on, but long-term oil demand could also be affected.

Even if they all declared bankruptcy, their infrastructure would still be there. I'd imagine someone would buy it and bring it back online if/when prices recover.

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

#175

Post by altcognito »

symplee wrote: post #127

Anyone still talking about peak oil? :) https://en.wikipedia.org/wiki/Predicting_the_timing_of_peak_...

I have to imagine you are being facetious. "good oil" peaked a long time ago, and while it is still being produced, the only reason we have oil at all is because of all the dirty fracking, shale and sand oil out there.

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

#177

Post by bluGill »

protomyth wrote: post #120
pixl97 wrote: post #87

Earlier quoted context omitted.

Eh, not really. I live in Texas and had worked for a company that developed a software product for management of things like oil leases. The big issue is not the inability to re-open oil wells, it's not that hard. It's the people. When you shut in production you lay people off. Eventually they go elsewhere. This is a big problem in oil boom/bust cycles. Getting trained operators that don't mess up the equipment or ca…

Talking to friends in the west, they are keeping a lot of operators on pay still. I guess it is a how long thing. I'm hoping all the folks with one of the tribes that made a lot of cash on oil put some away for a rainy day.

The oil companies have learned and try to keep some staff around. However they can only keep so many and for so long. If this is a fast recovery as some expect then the people will be needed next summer and it was a smart decision. If not...

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

#179

Post by zozbot234 »

dsfyu404ed wrote: post #74
lonelappde wrote: post #62

Earlier quoted context omitted.

Would they take delivery or would they pay the producers to dump it in the dirt or ocean? Oops into the ocean is cheap storage of useless oil.

The producers aren't gonna dump it (at least not in the US) because that is a surefire way to not only have the EPA bend them over but to have the EPA bend them over with the blessing of public opinion. Nobody wants to have their company be associated with pictures of oil soaked wildlife.

If you're an oil producer, you don't need to "dump" oil in the surrounding environment. You can just pump it back into the oilfield you've been extracting it from.

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

#180

Post by kube-system »

lonelappde wrote: post #84
somebodythere wrote: post #72

Earlier quoted context omitted.

Nobody wants to cut production, unless everyone else does so too. Otherwise they're just giving up a chunk of their revenue stream for a negligible rise in prices. It's a classic prisoner's dilemma game. Anyway, OPEC+ did cut production, a little bit. The market is saying it's not enough, at least in the near term.

Surely when storage is full you do start to want to stop production?

That's what producers would do in a competitive and rational market, but oil is not that. Oil is notoriously anti-competitive and political.

https://en.wikipedia.org/wiki/2020_Russia%E2%80%93Saudi_Arab...

Post reply on HN