Crude spot at $10.80 right now. 40 percent crash in an day.
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?
Oil plunges below zero for first time with May contract ending
161–170 of 546 posts
Re: Oil plunges below zero for first time with May contract ending
#162Earlier quoted context omitted.
Yes, this almost happened to me once when I was trading futures. My broker called me several times throughout the day and I couldn't take the call. When I finally did, he told me to roll my contract forward that day otherwise I would have to take delivery of 1000 bushels of corn.
I'd love to hear from someone that got stuck with the 1000 bushels of corn (or similar). What do you do? How in the world do you manage that?
Re: Oil plunges below zero for first time with May contract ending
#163If 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.
Re: Oil plunges below zero for first time with May contract ending
#164I'm a software developer, which translates to being somehow smart, but I'm not that into economics: Will this have a rubber band effect? E.g., the price will skyrocket in the next 2 - 5 years, because of this?
No. By what mechanism would a commodity price be elastic?
Re: Oil plunges below zero for first time with May contract ending
#165If 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 this comes to pass, I'm all for it. If we could take the demand we saw for oil, and put it into demand for high-speed Internet, we could see completely new, blue ocean markets. Imagine a surgeon being able to control a robotic surgery tool from the comforts of his/her home, where you have to have extremely low-latency or guaranteed low-latency networks. Or imagine mecheng offices running simulation jobs in the clo…
Nice to imagine, but the speed of light is too slow for a lot of low latency applications. After you allow the infrastructure some latency. A dedicated line might work, but without the network that is expensive.
Re: Oil plunges below zero for first time with May contract ending
#166Someone's going to find a creative way to store large amounts of oil and make a lot of money in a few years.
Maybe we can store it in large underground caverns (or maybe porous basins) and then pump it up to the surface only when we need it. We would probably want to coordinate with other people also doing pumping in their region, as not to end up with too much on the surface that we can’t use and then have nowhere to put it.
The other people pumping are coordinating... against you, not with you.
Re: Oil plunges below zero for first time with May contract ending
#167Earlier quoted context omitted.
EPA isn’t enforcing right now.
This is obviously wrong. You cannot dump oil, and anyone found to be dumping will be prosecuted. READ THE EPA STATEMENT.. https://www.epa.gov/sites/production/files/2020-03/documents... > The enforcement discretion described in this temporary policy do not apply to any criminal violations or conditions of probation in criminal sentences. ... > This policy does not apply to imports. They are relaxing REPORTING require…
This is obviously wrong. The EPA has explicitly stated they will not be enforcing regulation. Source: https://thehill.com/policy/energy-environment/489753-epa-sus...
Re: Oil plunges below zero for first time with May contract ending
#168What 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?
Yes, except they already took almost all the wealth out of the country so no need for gold bars rolling about on planes...
Re: Oil plunges below zero for first time with May contract ending
#169Earlier quoted context omitted.
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.
In the last 5 years, sure, especially with MBS holding the reins. But you can't just move your entire country onto solar power in 5 years unless you have huge hydro or battery resources already.
> But you can't just move your entire country onto solar power
If oil consumption enters extreme secular decline and SA doesn't transition to solar, then SA will be a horrendously poor country powered by oil.
If oil consumption enters extreme secular decline and SA does transition to solar, then SA will be a horrendously poor country powered by solar.
Re: Oil plunges below zero for first time with May contract ending
#170Earlier quoted context omitted.
If this comes to pass, I'm all for it. If we could take the demand we saw for oil, and put it into demand for high-speed Internet, we could see completely new, blue ocean markets. Imagine a surgeon being able to control a robotic surgery tool from the comforts of his/her home, where you have to have extremely low-latency or guaranteed low-latency networks. Or imagine mecheng offices running simulation jobs in the clo…
Nice to imagine, but the speed of light is too slow for a lot of low latency applications. After you allow the infrastructure some latency. A dedicated line might work, but without the network that is expensive.
If last-mile network is too much, you could have a colocated office park / operations center next to a hospital with a dedicated high-speed network. Then each surgeon can schedule / manage a patient without having to walk to a different OR, change scrubs, or be exposed to contagious viruses.
Mecheng tasks could be async / queue-based and latency wouldn't matter too much.
Regardless, I think it's really important to keep your bias for action high during this period of time.