Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US oil prices turn negative as demand dries up

bbc.com

Post reply on HN
Print view View original

91–100 of 130 posts

Re: US oil prices turn negative as demand dries up

#91

Post by hirsin »

burfog wrote: post #70
firebird84 wrote: post #52

Earlier quoted context omitted.

Why don't we just take delivery of futures contracts directly? Isn't this a great time to fill the reserve?

Pelosi blocked that. The workaround is to cheaply rent out the reserve as storage space, with the hope that someday a better congress will allow purchasing the oil.

Hm, I can't find any sources to this effect. Have one? I vaguely recall a bit about paying over market for petroleum to refill the reserve, with the idea being we fill a demand and prop up the gas industry.

Re: US oil prices turn negative as demand dries up

#92

Post by bouncycastle »

jliptzin wrote: post #15
User23 wrote: post #13

Earlier quoted context omitted.

> cost of storing that oil is getting really high If anything, this is a wild understatement. Each contract represents 1000 barrels of toxic waste. You can't just have that stored in a shed or something. And all the commercial regulation compliant storage is gone. I'd be willing to bet you will have a hard time even finding a tanker truck to take it to a buyer, since the tanker owners themselves are going to be using…

Forgive me if this is a stupid question but they can’t hold a gun to your head to force you to take the oil, right? Can’t you just refuse the delivery if you have nowhere to store it? Is there language in the contract for this kind of situation?

I believe you will get charged "demurrage" if you can't unload the oil in time. https://en.wikipedia.org/wiki/Demurrage

Re: US oil prices turn negative as demand dries up

#93

Post by xyst »

I might be in minority, but I think this is great for the clean energy sector and environment. The oil is not being used and thus not being consumed and converted into toxic products (carbon dioxide, and various other vehicle emissions) which are leaked into the environment.

I hope these oil companies dissolve over this unprecedented event.

Re: US oil prices turn negative as demand dries up

#94

Post by selimthegrim »

burfog wrote: post #70
firebird84 wrote: post #52

Earlier quoted context omitted.

Why don't we just take delivery of futures contracts directly? Isn't this a great time to fill the reserve?

Pelosi blocked that. The workaround is to cheaply rent out the reserve as storage space, with the hope that someday a better congress will allow purchasing the oil.

So frackers have to deleverage all by themselves? Cry me a (unpolluted) river.

Re: US oil prices turn negative as demand dries up

#95

Post by selimthegrim »

hirsin wrote: post #91
burfog wrote: post #70

Earlier quoted context omitted.

Pelosi blocked that. The workaround is to cheaply rent out the reserve as storage space, with the hope that someday a better congress will allow purchasing the oil.

Hm, I can't find any sources to this effect. Have one? I vaguely recall a bit about paying over market for petroleum to refill the reserve, with the idea being we fill a demand and prop up the gas industry.

McConnell proposed it in the coronavirus stimulus bill but it wasn't in Pelosi's version.

Re: US oil prices turn negative as demand dries up

#96

Post by throw_m239339 »

mensetmanusman wrote: post #57

It’s getting more likely that the fallout from the response will be worse than the virus would have been. For perspective, 800 000 people die every year in the world from suicide alone. Depression/anxiety/hopelessness has real consequences.

Yes it will, this thing is far from over. It will have huge consequences on civilization as we know it. It also demonstrated how weak all our economic systems are.

Re: US oil prices turn negative as demand dries up

#97

Post by bouncycastle »

csense wrote: post #83

If you owned an oil ship, what stops you from getting paid $25 a barrel to fill your ship up with oil, sailing to international waters, dumping it all in the sea, then go right back to port and do it again and again getting paid $25 a barrel each time?

These are only the prices of the "futures contracts". i.e. oil that hasn't been produced yet, as far as I understand. Actual physical oil still has a price > 0. (Spot price)

Here is a page that includes some spot prices https://oilprice.com/oil-price-charts

Re: US oil prices turn negative as demand dries up

#98

Post by [deleted] »

selimthegrim wrote: post #95
hirsin wrote: post #91

Earlier quoted context omitted.

Hm, I can't find any sources to this effect. Have one? I vaguely recall a bit about paying over market for petroleum to refill the reserve, with the idea being we fill a demand and prop up the gas industry.

McConnell proposed it in the coronavirus stimulus bill but it wasn't in Pelosi's version.

[deleted]

Re: US oil prices turn negative as demand dries up

#99

Post by toomuchtodo »

xyst wrote: post #93

I might be in minority, but I think this is great for the clean energy sector and environment. The oil is not being used and thus not being consumed and converted into toxic products (carbon dioxide, and various other vehicle emissions) which are leaked into the environment. I hope these oil companies dissolve over this unprecedented event.

Lots of silver linings from COVID (oil demand destruction, air pollution reduction, natural work from home experiment at scale).

Re: US oil prices turn negative as demand dries up

#100

Post by CydeWeys »

baud147258 wrote: post #51
markdown wrote: post #40

Earlier quoted context omitted.

At the risk of sounding stupid, I have to ask... Would it be possible to simply pump the oil back into the ground wherever the closest oil field is?

Doesn't the oil just come out of the oil well from its own pressure? Which would make pumping oil back in the oil field complicated

There's lots of empty oil fields out there though. Many of them could hopefully be refilled just using gravity?
Post reply on HN