Earlier quoted context omitted.
Find a broker, buy some futures.
Actually, if the OP is asking a question like that, they should stay far, far away from the market. It is not a game for newbies.
Cannot agree more. But maybe they want to learn.
The global oil market is broken, drowning in crude nobody needs
151–160 of 303 posts
Re: The global oil market is broken, drowning in crude nobody needs
#152Earlier quoted context omitted.
This does indicate market inefficiencies, but such tactics -- flooding the market with cheap products to kill competition, then raising prices back -- is pretty common. I have seen it everywhere from cell phone marketing to grocery stores. I have personally seen, twice, Stop and Shop moving in, dropping prices, driving a less-well-funded competitor out, then going back to business as usual. I do not see that the curr…
That depends on what you define as a market that isn't broken. In a perfect free market the oil producers make zero profits and this is a move towards fixing the market
In a perfect free market for a commodity price is the marginal cost: in other words if there is demand for N barrels of oil per day at the market price, that market price is the cost of production for the Nth most cheapest production cost. Anybody whose cost of production is cheaper makes money.
For a long time that marginal cost was Canadian oil sands oil, which cost about $40 a bbl to extract and $10 to ship. The Saudis who can produce at $10 a bbl were making money hand over fist.
Re: The global oil market is broken, drowning in crude nobody needs
#153Saudis want to put Putin out of the oil biz.
As such, gasoline in some parts of the US is currently going for $0.99/gal (0.24€/L, 0.21£/L or 20 Rs/L).
And it's sort of funny/sad that what is called "blacktop" can be had for less than free. Transportation and steamroller not included.
Re: The global oil market is broken, drowning in crude nobody needs
#154That's another piece of good news. Two countries with a particularly shitty track records are in a lose-lose situation.
Yes, citizens of those countries becoming poorer because you disagree with the politics of their leaders is good news.
But far more people have a better life because the oil cartel isn't United anymore.
Cheap oil is better for billions of people in India, China, and Africa
Re: The global oil market is broken, drowning in crude nobody needs
#155Earlier quoted context omitted.
I hate to disagree but the free market is often a great guide to tell us how much we need of something. The USSR tried telling industries how much to produce each year and we can agree that didn’t turn out well. Of course oil is a problem but a tax or cap and trade system would make more sense to address it.
In economics there is a wide consensus that the free market is a lousy guide when it comes to incorporating externalities like accelerating climate change causing millions of unnecessary deaths vs perceived need to drive around in gas guzzlers. Taxes and cap-and-trade systems are indeed the mechanisms of how current international agreements try to attempt CO2 emissions, they're a fine way to implement it.
It was my understanding that by driving around in a gas guzzler, I am precipitating human extinction, bringing forward the long-awaited day when the ecology of Earth no longer includes humans, which will be “better”.
Where did I go wrong? Was it when I evolved?
Re: The global oil market is broken, drowning in crude nobody needs
#156Earlier quoted context omitted.
This does indicate market inefficiencies, but such tactics -- flooding the market with cheap products to kill competition, then raising prices back -- is pretty common. I have seen it everywhere from cell phone marketing to grocery stores. I have personally seen, twice, Stop and Shop moving in, dropping prices, driving a less-well-funded competitor out, then going back to business as usual. I do not see that the curr…
That depends on what you define as a market that isn't broken. In a perfect free market the oil producers make zero profits and this is a move towards fixing the market
" In a perfect free market the oil producers make zero profits"
Where does this conclusion come from?
Re: The global oil market is broken, drowning in crude nobody needs
#157I guess storage producers stocks are soyrocketing
Re: The global oil market is broken, drowning in crude nobody needs
#158What happened to "Peak Oil"? Was there some assumption in those projections that proved to be wrong?
My impression is that there are vast amounts of oil at increasing levels of extraction cost. As cheap oil is used up, the price rises and it becomes financially viable to extract more expensive reserves. Eventually, the remaining oil may be so costly to extract that renewable energy will be cheaper, but it seems unlikely that we will ever extract the last drop of fossil fuels. (Ignoring all the other reasons for cost…
Renewables are already cheaper - solar in the US is the cheapest form of energy in the world. The remaining challenges are improving batteries for storing it, and continued panel efficiency to reduce the amount of space needed for generating solar power.
Re: The global oil market is broken, drowning in crude nobody needs
#159Earlier quoted context omitted.
From what I read (analysts and decision makers) that's not what's going to happen. Money is injected and more will be to salvage industries and make up the loss (by increasing production after the crisis (or before the end)). This will increase pollution and energy demands in the coming months at a higher level than before the crisis. Well, from what I've read. I am a total idiot in these matters.
Government and industry will want demand to ramp back up, but it's doubtful that will be supported by consumers. I don't think you're going to see an instant rush back to international travel. Same goes for most other industries. This isn't a situation where you just wake up one day and it's over. It's not a war where you just make up and get back to work. This virus is out there, and most experts say even if you wer…
I work in the travel industry (in a weird IT/social media guy position) and the consensus seems to be that people will get back to traveling but in their own country.
“Public” tourism industry is going to be okay (and aren't too worry about it for better or worse) but OTA and traditional tour operators are bleeding and some will eventually die.
Small local actors too but they will be replaced (or back after a year of unemployment, with loans from bailout banks).
Re: The global oil market is broken, drowning in crude nobody needs
#160Earlier quoted context omitted.
The US is the worlds largest oil producer
Sure but that statistic is always measured as oil + natural gas + additives + other hydrocarbons. If you can find a source for crude oil extraction, not production, the US would almost certainly not be #1.
Recently the US has been far in the lead for even crude production. Here is a source where you can see the break downs by type for every country from from 1973 to 2018[1]. Data from the US Energy Information Administration. Download the .csv file for easier browsing.
The totals for just crude, not including petroleum liquids, for 2018 are:
US : 16.8 Mb/d
Saudi Arabia: 12.4 Mb/d
Russia: 11.4 Mb/d
[1]https://www.eia.gov/international/data/world/petroleum-and-o...