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Oil plunges below zero for first time with May contract ending

bloomberg.com

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Re: Oil plunges below zero for first time with May contract ending

#431

Post by colinmhayes »

ncallaway wrote: post #415
colinmhayes wrote: post #317

Earlier quoted context omitted.

I've never been to Cushing Oklahoma. I feel like it should be possible to build a big tank in a week or two. Why isn't available storage space skyrocketing?

> I feel like it should be possible to build a big tank in a week or two. When is the physical settlement of the contract? My understanding is that physical settlement of the May futures contract is 21 April (that is, tomorrow). So you don't have a week or two to build your big tank. It needs to be finished tonight. https://www.cmegroup.com/trading/energy/crude-oil/light-swee...

Looks like first delivery isn't until may 1 according to that page.

Re: Oil plunges below zero for first time with May contract ending

#432

Post by dragonwriter »

cma wrote: post #388
ToFundorNot wrote: post #313

Earlier quoted context omitted.

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)?

> That still doesn't answer: why wasn't it anticipated and reflected in earlier pricing

Because despite the people that like saying all future events are reflected in current prices, the fact is humans, both individually and aggregated into markets, are imperfectly prescient, thus future events are basically never perfectly priced in to to current market prices.

Re: Oil plunges below zero for first time with May contract ending

#433

Post by philjohn »

paxys wrote: post #204
bluedino wrote: post #103

Earlier quoted context omitted.

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Lamborghini, his son will drive a Lamborghini, but his son will ride a camel"

People (justifiably) criticize the middle-eastern countries for a lot of things, but they are all aware that all the oil revenue is eventually going to dry up. Most of them have been hard at work transforming their economies for decades, not an easy thing to do when you're in the middle of a desert.

Sounds like a great place to put massive solar farms ...

Re: Oil plunges below zero for first time with May contract ending

#434

Post by oldsklgdfth »

yingw787 wrote: post #422
oldsklgdfth wrote: post #400

Earlier quoted context omitted.

> mecheng offices running simulation jobs in the cloud or an on-premises instead of each having a workstation, and being able to cluster that compute together that's totally a thing. worked on low-latency, high resolution remoting software for this purpose exactly. Buy a bunch of beefy servers and have scientists remote in from a laptop to run graphic intensive simulations, rather than buy a workstation for everyone.

I never understood why as a company you wouldn't prefer an on-premises computer cluster with some overhead and give employees thin clients, rather than give everybody MacBook Pros. Thin clients + servers make much more sense to me from a business perspective. They seem much easier to secure (just revoke some keys if you need to fire somebody), much easier to give everybody a reproducible dev env and avoid a lot of sh…

One recurring issue was the customer's network latency. A corporate vpn that bounces traffic around adds enough latency to make a really good solution feel comparable to using vnc. Reorganizing the network adds to the cost of the solutions.

I'm currently experiencing this. I live near my office and have sufficiently fast home internet. But connecting to the company network and attempting to work on a machine remotely is very painful. Working locally and commiting or accessing mail is still painful, but managable.

Re: Oil plunges below zero for first time with May contract ending

#435

Post by snowwindwaves »

bdcravens wrote: post #163
nopinsight wrote: post #149

If 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.

you can look to calgary and alberta for a prediction of what's in store for Houston in that case!

Re: Oil plunges below zero for first time with May contract ending

#436

Post by mcv »

koheripbal wrote: post #334
jetrink wrote: post #320

Earlier quoted context omitted.

To be doubly pedantic, it probably is an int in many places, to avoid rounding errors.

Correct. In finance it is the norm to store all currency amounts as int.

Let's hope it's a signed int, then.

Re: Oil plunges below zero for first time with May contract ending

#437

Post by blaser-waffle »

beerandt wrote: post #370
nugget wrote: post #171

Earlier quoted context omitted.

Are there any signs of this starting to happen given how low prices have gone?

One of the popular indicators is number of listings and prices for F-250 class and bigger trucks, especially in places like West Texas and North Dakota. Of course the automotive market in general is "non-typical" at the moment, so there are probably multiple interpretations to be made of whatever the market status is.

Though I'm from the US I currently live in Alberta, Canada, and can confirm.

I recall seeing CBC news articles about all of the cars and trucks left abandoned in the parking lots of the Edmonton and Calgary airports. All of the out-of-province workers just split once the pickings became poor. Cheap Tacoma trucks for a year or two, I regret not picking one up off of Kijiji (aka Canadian Craigslist) while I had the chance...

Re: Oil plunges below zero for first time with May contract ending

#438

Post by Shivetya »

nopinsight wrote: post #149

If 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…

the danger is some of these countries will see no reason to not start something with their neighbors or others

Re: Oil plunges below zero for first time with May contract ending

#439

Post by xoa »

hailwren wrote: post #416
xoa wrote: post #379

Earlier quoted context omitted.

> Nice to imagine, but the speed of light is too slow for a lot of low latency applications. Is it? Looking around, it seems average visual reaction times (VRTs) are on the order of 250 ms, and even the fastest VRTs are well over 100 ms. A study looking specifically at medical students for auditory and visual reaction times ( "A comparative study of visual and auditory reaction times on the basis of gender and physic…

I think you've mixed up your logic a bit. A slow visual reaction time means that surgeons are already reacting slower in the real world. Any latency added (!!) by a network further adds to the delay between surgeon reaction and real world stimulus. You argued that when we compare the average VRT additional latency is not large. But you should have argued that there was enough buffer between average VRTs and the time…

>You argued that when we compare the average VRT additional latency is not large. But you should have argued that there was enough buffer between average VRTs and the time needed for a surgeon to react to allow adding to average VRT.

If you look at the paper I linked, it includes not just the mean but the standard deviation, which is on the order of 10-20ms. That means we are already by definition accepting that kind of variability regardless does it not? If +/- 10ms was critical, it'd imply we should be filtering for that already but it doesn't appear that's the case at all. Furthermore, hunting around for other research on the subject indicates far higher variability than that is also introduced by standard stress factors (lack of sleep, overload, distractions, etc). All of which are strongly present in existing medical practice as well. To the extent working remotely might reduce some of those it could in principle even effectively cancel out a 10ms penalty.

I stand by saying it's not at all clear that sub-10ms (or potentially even higher) would at all be the critical factor preventing remote work. Speed of light seems to be far less important then factors like total network disruption, robotics reliability, etc.

Re: Oil plunges below zero for first time with May contract ending

#440

Post by baq »

mcv wrote: post #425
ISL wrote: post #262

Earlier quoted context omitted.

My grandfather in Colorado did the opposite once in the 1970s. He needed some cattle, so he bought a small quantity of cattle futures of some form (I was too young when I heard the story to remember the details) from a broker/commodity trader in Chicago. When the contract approached the settlement date, the broker called to ask him to sell. Trouble was, my grandfather just wanted cows, not cash. The broker was frustr…

I don't know. Somebody has to take delivery of the cattle, so why not the guy who wants some cattle?

yeah, this just makes the whole business of futures trading seem like a scam where the people actually interested in the things being traded are pawns.
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