Still going down, settling at -$37.63/ bbl down 300% in a day.
We're watching price movement that'll be remembered forever (unless it happens again next month).
Still going down, settling at -$37.63/ bbl down 300% in a day.
We're watching price movement that'll be remembered forever (unless it happens again next month).
Not soon.Hopefully they can revive him
That's true we do see that in various commodities futures contracts from time to time... Huge moves into expiry etc.On the day before contract expiry, it's just a register of desperation for a very small handful of longs that need physical storage. They're basically saying "I will pay any price for you to take this oil that is about to be delivered to me, off my hands".
I wouldn't read all that much into it (other than, demand for storage is very high and supply of storage is very low), it's an illiquid low OI contract. Nobody is posting "we're watching price movement that'll be remembered forever" when some illiquid ASX microcap jumps 500% in a day.
It's not that often that the physical realities of production and storage collide with paper speculators.On the day before contract expiry, it's just a register of desperation for a very small handful of longs that need physical storage. They're basically saying "I will pay any price for you to take this oil that is about to be delivered to me, off my hands".
I wouldn't read all that much into it (other than, demand for storage is very high and supply of storage is very low), it's an illiquid low OI contract. Nobody is posting "we're watching price movement that'll be remembered forever" when some illiquid ASX microcap jumps 500% in a day.
When forward prices go negative it means producers are needing to pay for their oil to be "taken.".
My point related to the interplay, and it affects what a producer with physical can sell, and at what price.Huh?
Here is a completely different take to what I think is your laughably wrong take:
When forward prices of WTI go negative on the day before the contract expiry session while Cushing is full, a bunch of financial participants who thought they were so smart or could find storage, got caught with their pants down.
The trading desks at energy producers are not long, they are short in the futures market. They will be the ones delivering the oil to those pants down longs and they don't care that the price is -$30 or whatever, they rolled into shorts in late March or early April, not yesterday morning.
They already got paid whatever the price was when they rolled in.
That is the whole point of the futures market.
My point related to the interplay, and it affects what a producer with physical can sell, and at what price.
So are they to try and pour the excess oil into some sort of paper made contract tank.An energy producer with physical oil to sell is not selling it into the about-to-expire May contract which is pretty much no bid. THEY ALREADY SOLD IT.
$-30 or whatever WTI the day before expiry does not mean producers need to pay for their oil to be taken.
Stop spreading crap.
There is a spot market and a futures market.An energy producer with physical oil to sell is not selling it into the about-to-expire May contract which is pretty much no bid. THEY ALREADY SOLD IT.
$-30 or whatever WTI the day before expiry does not mean producers need to pay for their oil to be taken.
Stop spreading crap.
“It’s like trying to explain something that is unprecedented and seemingly unreal!,” wrote Louise Dickson, oil markets analyst Louise at Rystad Energy, in emailed comments.
“The most simple explanation for negative oil prices is that midstream players are now paying ‘buyers’ to take oil volumes away as the physical storage limit will be reached. And they are paying top dollar!” the analyst said.
You are just arguing with yourself, not me.Wow, Louise Dickson, what a storied analyst...previous work experience includes English teacher in Moscow before she graduated to contract writing for "Investment Club" and "Coffee Mania".
I am sure she knows what she is talking about after 2 years as an analyst for BP and Rydstad.
Oh wait, her "most simple explanation" (great English skills there) doesn't actually match how MIDSTREAM (note, not even she is saying producers, only you @rederob) oil players operate in reality.
Good job.
A while ago, we visited this, the truckies etc. And AurizonThe price of fuel has to be a huge plus, for those that have a high fuel component in their bottom line, QUBE (QUB)
Aurizon and Linfox have increased the number of weekly intermodal services by 20 per cent.
Maybe this should be in a different thread?Australian Rail Track Corporation CEO John Fullerton recently said national general freight movements on its 8500km network had increased 14 per cent in March.
“The COVID-19 outbreak has sparked an unprecedented challenge for Australia’s freight and transport industry, with the country’s demand for critical supplies prompting a surge in rail freight,” Fullerton said. .“Moving freight to cities and regional towns across the country has never been so important, which is why the government has deemed our industry an essential service.
“This puts a lot of responsibility on our shoulders; but in collaboration with our rail freight customers, government and industry partners it’s been wonderful to see our teams rise to the challenge to keep Australia’s supply chain intact and our economy moving.
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