That's another piece of good news. Two countries with a particularly shitty track records are in a lose-lose situation.
Unfortunately the goal is to drive out US Shale ...
So fracking stops in the US. Win-win-win?
The global oil market is broken, drowning in crude nobody needs
81–90 of 303 posts
Re: The global oil market is broken, drowning in crude nobody needs
#82What happened to "Peak Oil"? Was there some assumption in those projections that proved to be wrong?
[deleted]
Re: The global oil market is broken, drowning in crude nobody needs
#83Earlier 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…
Citation for “most experts.” Most actual virus experts I’ve seen say the opposite: the virus is mutating slowly (at least in the spike protein, which is the part the immune system responds to) and the “reinfection” measurements are likely measuring residual virus genetic material, not necessarily true reinfection.
@trvrb on Twitter. And this other guy, with this thread: https://mobile.twitter.com/PeterKolchinsky/status/1244029896...
(Which doesn’t mean I disagree with your overall point that this won’t be an instant-bounceback.)
Re: The global oil market is broken, drowning in crude nobody needs
#84What happened to "Peak Oil"? Was there some assumption in those projections that proved to be wrong?
I love it. All the hysteria about peak oil from 15-20 years ago never happened and now we have a bunch of hand wavy explanations as to why. People just can’t admit it was BS and a lot of us bought into it.
Re: The global oil market is broken, drowning in crude nobody needs
#85Serious 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.
Given that you're asking this question, USO ETF. The alternative is options trading which is a bit more complicated but, if you're interested, is really fun to learn about.
Re: The global oil market is broken, drowning in crude nobody needs
#86Earlier quoted context omitted.
Find a broker, buy some futures.
the article says the futures are still trading high, meaning you probably couldn't make a lot of money buying them right now, likely because traders know the prices are going to come up too. Am I misunderstanding?
You’re correct.
Selling the futures is the profitable end of the trade. Spot prices for WTI are about $20. That same oil can be sold in May 2021 for 35.53. Part of that difference is cost of carry (storing and insurance), but there is still a profit to be made.
Re: The global oil market is broken, drowning in crude nobody needs
#87I know this is the wrong attitude but with no ties to the oil industry that I am aware of I personally am enjoying watching the market crash and my cost of gas go way down. However my understanding of the economy is poor. Does this negatively effect the average joe or mainly oil producers?
The oil crash is contributing to the stock market crash, and thus to the overall economy being down, potentially meaning layoffs for the average joe. Plus this might cause smaller producers to go bankrupt, meaning that prices could rise even higher in the future. Of course that’s only true if we continue to use oil, which we need to divest from as a species.
Re: The global oil market is broken, drowning in crude nobody needs
#88That'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.
That money didn't go to the citizens anyway.
Re: The global oil market is broken, drowning in crude nobody needs
#89Markets 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…
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.
Re: The global oil market is broken, drowning in crude nobody needs
#90Demand for oil drops, prices fall, stocks pile up, production scales down. There is nothing broken here. This is exactly how a market-based economy works.