451–460 of 546 posts
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Saudi makes up shit when they say their extraction costs are $3/barrel. A lot of clever accounting in that one. Actual extraction costs are roughly $10-$15/barrel.
Why do they or why would they make up extraction costs? (Genuinely interested)
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If you have the answer to the question you are asking, you should change careers into oil contract trading; you'll probably make a bundle. In short, the reason nobody anticipated it is because the future is unknown. The reason any market is unpredictable is because there are too many variables to account for.
I think he's asking why the market didn't have a better estimate of storage capacity and utilization and what changed in the estimate from yesterday to today.
Correct me if I'm wrong, but: The people doing the trading are middlemen, and have no capacity period. They expected to be able to sell it all off to the energy companies, even at a loss, so they normally don't accept any physical product. But the energy companies ran out of capacity - something the middlemen (traders) don't have direct knowledge of - so got caught unexpected with contracts they can't sell, and now have to accept the physical product.
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This article from March 25 states that rates at Cushing more than doubled from 20 cents per barrel per month to 50 cents since February. https://www.reuters.com/article/global-oil-storage/global-oi...
If storage rate is cents per barrel and barrels cost negative dollars per barrel, is sounds like storage is still very affordable.
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They've been talking about the House of Saud falling for decades now and it hasn't happened yet. Although I thought A few years ago the young prince was going to make a bunch of drastic moves away from oil in order to secure the economic future of the country? Beyond a few articles in 2017, I haven't seen much of an update on that, anybody know if it was all just bluster, or are real things happening that would softe…
Every Arab ruler has tried to do this for decades, but this is a HARD problem: 1) Their climate sucks 2) They have very little arable land and lack water 3) Production of electricity is expensive 4) A lot of interior cities - not a lot of port access So, from a geographical perspective, what is SA supposed to produce that gives them a comparative advantage against the rest of the world? Then you move into the politic…
The biggest issue is the effect that the resource curse on the workforce, as you note. There is a small contingent of well-educated Saudis (largely found in Saudi Aramco), and the country has instead relied largely on giving their population sinecures in the government, which hasn't exactly done wonders for productivity.
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Not to mention they just had an IPO on their state oil company and raised a shot load of money.
I thought that had been called off no?
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What I don't understand is why the sudden move today? Did the longs think they had a place to put the oil on Friday but found out over the weekend they had no place to put it? Just seems like you would know what to do with the oil on Friday. Note this is not a rhetorical question, I would sincerely like an answer.
> What I don't understand is why the sudden move today? Did the longs think they had a place to put the oil on Friday but found out over the weekend they had no place to put it? Just seems like you would know what to do with the oil on Friday. Note this is not a rhetorical question, I would sincerely like an answer. Guys like myself, an ex fund manager, could be tourists in the oil market. I know I was, speculating o…
Disclaimer: I worked for the hedge fund at the time that bought Amaranth's holdings for pennies on the dollar. Was supposed to be a joint buyout with JP Morgan Chase, but Chase couldn't calculate the risk in time before closing and left us with all of the eggs in the basket. We ended up making a killing on the deal as we had the assets to weather the margin calls. I still can't believe anyone gave B.H. any money to trade with after that, but someone did...
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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.
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Now trading at -$37.00. That's right. Negative thirty seven dollars. Today: -54.67, -299.23%. https://www.marketwatch.com/investing/future/crude%20oil%20-...
I wonder if that negative int broke a bunch of code in software around the world
(I obviously know percentage changes are not made for this)
Completely naive question, but I'm curious: all of the negatively priced oil is coming from Saudi Arabia and Russia. What keeps the US from applying large tariffs to oil imports from those countries (or on all imports)? If it's in our best interest to keep US oil companies alive (I understand that it is), wouldn't this be an effective way to accomplish this goal, with the side benefit of receiving additional tax reve…
Oil companies may benefit from keeping oil expensive, but other parts of the economy that depend on oil do not. For them, tariffs are an extra tax on them and ultimately consumers.
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I'm going to try and translate the simplest concept that tempsy is saying. The sellers were looking to sell for most of last week, however there fewer buyers as the contract approached its end, and those who were willing to buy wanted a lower price: Volume of transactions on Friday was 344k, Thursday was 111m, Wednesday was 147m. In the past 30 days, the low was 686k (ex Friday), and the high was 459m. Traders slowed…
That still doesn't answer: why wasn't it anticipated and reflected in earlier pricing (even if volume-weighted it would be a much smaller drop, it still seems to have been missed even from futures options)?