Despite Canada's dollar doing terribly, gas stations are selling it for $0.64/Litre where I live.
I haven't seen it this low in maybe 20 years.
The global oil market is broken, drowning in crude nobody needs
41–50 of 303 posts
Re: The global oil market is broken, drowning in crude nobody needs
#42Serious question: how do I invest in some of those $10 barrels of oil? It seems like a contract to deliver oil at $10 in 2021 is likely to be worth more than by next year.
See ticker symbol USO. Its cheap now, $4.47/share. https://seekingalpha.com/symbol/USO?s=uso
Re: The global oil market is broken, drowning in crude nobody needs
#43Markets are broken when oil usage develops towards sustainable levels? We have to drastically cut down oil use, let's not pretend that the pre-corona oil consumption was tolerable, much less desireable. Now would be a good opportunity make internaltional agreements to cap oil consumption and extraction to its current level in shutdown, and when the shutdown starts to get rolled back, the shock will be smaller as risi…
This!!! This seems like great news to me.
Re: The global oil market is broken, drowning in crude nobody needs
#44Serious question: how do I invest in some of those $10 barrels of oil? It seems like a contract to deliver oil at $10 in 2021 is likely to be worth more than by next year.
The $10 barrels are for delivery now, not next year.
If you can store the oil you can earn a lot of money now. But most people can't store much oil, compared to the volumes that are being pumped out of the ground. And for many of the producers, slowing down production by more than a few per cent is also difficult — once you turn off the tap you don't really know whether the oil is going to start flowing again later. So the effect is a steep price fall.
Re: The global oil market is broken, drowning in crude nobody needs
#45What happened to "Peak Oil"? Was there some assumption in those projections that proved to be wrong?
Turns out the world has loads of oil, and is still discovering more, and even more natural gas, coal and so on. We’re not running out anytime soon, which is actually a problem.
Nope, discoveries worldwide peaked 4 decades ago. Production follows discoveries with a 4 to 5 decades delay. For scale, we need to find out about a new Saudi Arabia every year. We simply don't.
Re: The global oil market is broken, drowning in crude nobody needs
#46The market is broken because demand is way down, but production isn't being lowered to match. Saudi Arabia intends to keep their production high. The other producers are losing money but haven't reduced output, because changing output levels is more expensive than taking the loss.
Re: The global oil market is broken, drowning in crude nobody needs
#47The demand will rise again once this virus is done with.
Wouldn’t it be nice if it didn’t, though. Large numbers of people working from home, cruise and airlines running fewer routes, people staying local instead of traveling so much, more local farming and manufacturing so less money spent on shipping....
Not just nice, but necessary, to avoid megadeaths from unchecked global warming.
Re: The global oil market is broken, drowning in crude nobody needs
#48The oil isn't just magically coming from some unstoppable font.
They're going to have to bite the bullet and shut some wells. They say as much at the bottom of the article. It's not like we haven't had oil downturns before...
Re: The global oil market is broken, drowning in crude nobody needs
#49What happened to "Peak Oil"? Was there some assumption in those projections that proved to be wrong?
"Peak Oil" was the idea that the demand for oil would exceed the supply we are able to access. Yet we keep finding more and increasing our ability to access more thanks to technological progress.
But mostly, "Peak Oil" fears were ginned up by a press who love to promote tales of doom and destruction. Those trumpeting the threat of "Peak Oil" demanded broad governmental and social intervention to avoid what was assured to be a massive economic disaster. There were assertions that those denying the threat of "Peak Oil" were the Neville Chamberlains of their time or villagers refusing to vacate under the imminent threat of volcanic eruption.
No mistake - oil has a fixed supply. It will run out. But it turns out that won't happen for some time.
https://www.forbes.com/sites/michaellynch/2018/06/29/what-ev...
Re: The global oil market is broken, drowning in crude nobody needs
#50I find it odd that the article does not mention the oil price war between Saudi Arabia and Russia. https://www.reuters.com/article/us-opec-oil-policies-idUSKBN...
is the price war the reason, the consequence or the accelerator of the current market?
IMHO the coronavirus scare was the catalyst that sparked the price war.