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I tried to buy an actual barrel of crude oil (2015)

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Re: I tried to buy an actual barrel of crude oil (2015)

#61

Post by foota »

ldoughty wrote: post #31
rhizome wrote: post #28

Earlier quoted context omitted.

Just with a cursory "oil tanker for sale" search, they appear to be for sale in the $10-20MM range.

If the oil tanker can hold 2,000,000 barrels at -$35/ barrel you are being paid $70 million to store the oil for a few months... Of course, the next question is who pays for transport to/from the tanker, labor, dock fees, employees in ship (unless you can simply "park" it for a fee)

Yeah, I was wondering. I think if someone had the experience needed to put this together quickly it would likely be profitable.

It looks like most tankers are ~200,000 metric tons which at ~8 barrels per metric ton is roughly 1.6 million barrels. You also really only need to store it for a month, I think June futures are around $20 still, and so it's a diff of ~$60/barrel.

Re: I tried to buy an actual barrel of crude oil (2015)

#62

Post by jedberg »

jefftk wrote: post #52
jedberg wrote: post #40

Earlier quoted context omitted.

If you auto merged the comments from the last time, in theory they would quickly fall to the bottom because their time based value would be so much lower than the new stuff. Maybe also disable replies to old comments and make them a different color? To be fair, we could never figure out how to get this right on reddit either, but HN has a better comment sorting algorithm than reddit so it might actually work here.

Why do you want to discourage replies to old comments?

Because the people who made the comments won't know that someone replied since HN doesn't have a notification system.

Re: I tried to buy an actual barrel of crude oil (2015)

#64

Post by foota »

entangledqubit wrote: post #37
chha wrote: post #25

Earlier quoted context omitted.

> Maybe environmental issues? Amongst others. It's not enough to just dig a hole in the ground, you have to make sure it doesn't seep into the ground as well. In addition, you have the always present risk of fire...

Unfortunately, right now it seems that there is incentive out there for oil to "go missing" for a profit -- presumably at the cost of the environment. I'm curious if anyone is thinking about trying to replace their fracking fluid with oil for a while...

@recursive, I read here that there are contractual obligations in play. Search for jofer@'s answer.

Re: I tried to buy an actual barrel of crude oil (2015)

#65

Post by jedberg »

throw_away wrote: post #54
jedberg wrote: post #48

Earlier quoted context omitted.

You've dashed all my hopes for a quick buck, but thank you for the enlightening information!

https://itsalwayssunny.fandom.com/wiki/The_Gang_Solves_the_G...

Similar concept, even older :)

https://seinfeld.fandom.com/wiki/The_Bottle_Deposit

Re: I tried to buy an actual barrel of crude oil (2015)

#66

Post by wefarrell »

kart23 wrote: post #50
wefarrell wrote: post #46

Earlier quoted context omitted.

Schwab allows retail investors to buy junk bonds. I bought one a few weeks ago.

Really? Care to share your experience/details?

Sure, I bought a Delta Airlines bond with a 3.4% coupon for 93 cents on the dollar due in a year from now. Provided Delta doesn't go bankrupt in a year I will make 10%.

They have a pretty healthy balance sheet compared to their peers and I don't expect the government to let the sector fail in such a way that bondholders get wiped out.

Re: I tried to buy an actual barrel of crude oil (2015)

#67

Post by scurvy »

jofer wrote: post #13
scurvy wrote: post #10

Considering that the front-month oil contracts went negative today (paid to buy a barrel of oil), I think more (well funded and adept) players will try to hastily arrange more storage facilities. There's just no place to put the stuff right now. It's quite difficult to turn-off an active well. Deep-water wells are all but impossible to stop.

Actually, deep water wells are usually quite easy to shut in by design. They frequently need to be shut in due to hurricanes or infrastructure maintenance. You don't drill a $100 million deepwater well without all the bells and whistles. Very cheap wells with low production (onshore, say ~10 barrel per day) are the ones that tend to be difficult to shut in, as they're not designed for easy temporary shut-ins. That ha…

That might have been true 20-30 years ago. Today, all of the easy oil has been tapped. They're going out farther, deeper, and under much high pressures than before. Oh, and they're less regulated.

> You don't drill a $100 million deepwater well without all the bells and whistles. You will if you can make a couple $B off it. It's a risk. The deep gulf has mudslides that take out rigs. It happened to Taylor Energy in 2004. All the tech in the world couldn't prevent that spill.

https://www.nola.com/news/article_a55f87c0-8253-11ea-9f24-23...

Re: I tried to buy an actual barrel of crude oil (2015)

#69

Post by scurvy »

Digory wrote: post #19
scurvy wrote: post #10

Considering that the front-month oil contracts went negative today (paid to buy a barrel of oil), I think more (well funded and adept) players will try to hastily arrange more storage facilities. There's just no place to put the stuff right now. It's quite difficult to turn-off an active well. Deep-water wells are all but impossible to stop.

The negative price has to do with the short delivery date, and the lack of storage at the (landlocked) delivery point. June 2020 WTI is still over $20/barrel. If anyone had storage to bring online in the next few weeks, in Cushing, Oklahoma, they'd make a killing. At this point, they're going to need to ship it to a port, to get on a tanker.

Did you read the part where I wrote, "there's no place to put the stuff?"

I also specifically said "front month contract".

June oil is barely over $20 today and will probably drop under that mark by week's end.

Re: I tried to buy an actual barrel of crude oil (2015)

#70

Post by dsfyu404ed »

selectodude wrote: post #47
downerending wrote: post #38

Earlier quoted context omitted.

Actually, I think the real players have already been doing this for a few weeks. If there's a buck to be made, you can bet someone is on it. I was wondering whether they couldn't rapidly build some new storage (cost-effectively), but probably the answer is no .

I'm not sure there's much of anything that will get the NIMBYs riled up more than a million barrels of crude.

Add blue collar people to the mix and it acts like a NIMBY rage multiplier. I'm picturing the movie plot now:

A bunch of gulf coast fisherman, effectively unemployed by Corona hatch a plan to make a buck by taking advantage of the negative price of oil futures. They pool their resources and somehow get their hands on a derelict Venezuelan tanker, cheap because of favorable exchange rates, in order to take delivery of some obscene amount of crude as part of a scheme to make money on futures. Being on a budget of course they crew the thing themselves, it's a ship after all, just a little bigger than the ones they usually handle. Things don't exactly go as planned when they travel to Venezuela to take possession of the ship. Their journey from there to the Port of Houston to pick up their cargo is mired by an incompetent coast guard, environmental activists and a vengeful ex-wife turned local politician.

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