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Are you saying that futures trading below $0 is not significant of anything? Has the spread between 2 months consecutive futures pricing ever been as large as seen today? Will the supply and demand for June deliveries change very much from May, and if not why should June prices hold to 20-22?
Please, educate us "know nothing" casual followers.
I educated enough, read my earlier posts. These are closing out of positions trades because most don't have a need for real oil barrels. Most professionals got out of their positions days ago but for the few who didn't it was a massive problem they had to solve. The ultimate holders of real deliveries will take traders money and make arrangements to ship the oil through pipelines to places where they can accommodate it, most likely ships on the Gulf Coast
So since gas hasn't dropped proportionately in response to this, is it safe to say that someone will be posting record profits (or at least have record margins) this quarter?
You have to buy crude cheap, (easy to do today), make more valuable finished products (again easy to do if you have a refinery), then you have to sale those finished products......opps no one is buying so no massive profit to be made on this volume of demand for product. The world has topped no one is winning
Does anyone still doubt we are in a depression? I wonder how many will starve to death or commit suicide or end up divorced. How many families will be destroyed by bankruptcy. This is very bad for the nation and many millions. When will they realize that there are worse things than getting the flu.
Yes thousands have died. But will many more die because the cure was worse than the disease.
Why do we keep seeing idiotic posts equating this with the flu? It is *not* the flu, it spreads much more virulently and it kills more. It is not 'thousands' that have died, it's *tens* of thousands (about 41,000 in the US as of this evening's news reports. ERs are short-staffed, some are closing...and we have complete morons 'protesting' and demanding that 'stay at home' orders are lifted- If this thing is allowed to run rampant, the death toll will run into the tens of millions, in the US alone...and that isn't counting the multitude of deaths from other causes, who will die because health care facilities are over-run with covid patients and there aren't enough medical staff and first responders to take care of them.
According to data from Reuters, the over-all death rate of confirmed cases (world-wide) is running at about 6.8%. Thios is serious.
At this point, I'm hoping that all of the idiotic protesters and naysayers get hit with it and hit *hard*.
Quote:
Originally Posted by Malloric
For May futurecontracts. The cost of a barrel of oil is $20. That just reflects that nobody wants to hold a contract for May delivery of crude oil because, well, no one knows where to put it. Not holding a bunch of oil contracts it looks like a bit of an overreaction... on the other hand I'm not worrying about where I'm going to store a bunch of crude oil in May with storage capacity quickly filling. Refineries don't want it, at least not all of it, and where's it go? Do you just leave it sitting in a super tanker. They're probably going to charge you for that and it won't be cheap. So people are willing, desperate, to unload future contracts and nobody wants them.
I mean, it's kind of funny because of how much speculation there is in any derivatives market from people who won't ever take delivery versus industrial uses hedging on prices who will but it's an actual problem as well.
Some time ago, someone I worked with was trying to convince me to get involved with trading commodities futures contracts, and that was one of the key issues I had- what happens if I have to take delivery on the contracts?
Later thoughts that I had, after I chose not to get involved with such speculation, was that people who have no intention of taking delivery of the products should not be allowed to participate in the market because their participation artificially manipulates the price.
Quote:
Originally Posted by Northern Maine Land Man
Crude oil just sold for SEVEN CENTS a barrel. Some trader did it for the entertainment value, just like the guy who was the first ever to buy crude for $100 a barrel. He also did it for the entertainment value. Then it went to $152 a barrel. They just discovered a good size oil field right next to the Keystone Pipeline. Tell me that was not known before the pipeline was built.
Quote:
Originally Posted by RocketSci
Nope, just looked out of habit and saw the price. That 15 cent per barrel price certainly got my attention. This isn't just a hurricane, it is a cosmic storm.
And holy s*** it is now trading negative.
Yeah, because the speculators are scared that they are going to get left holding the bag, and will have to make good on the contract.
Quote:
Originally Posted by Willy702
I educated enough, read my earlier posts. These are closing out of positions trades because most don't have a need for real oil barrels. Most professionals got out of their positions days ago but for the few who didn't it was a massive problem they had to solve. The ultimate holders of real deliveries will take traders money and make arrangements to ship the oil through pipelines to places where they can accommodate it, most likely ships on the Gulf Coast
Yep, like short-sellers in a bull market, these speculators will have to take a loss.
Speculators add liquidity to the market. What's next the government is going to tell me what kind of toilet paper to buy? You want the govt to regulate everything?
It's significant in that somewhere people in hedge funds that like to speculate on derivatives are freaking out going oh, god, I might need to take deliver of a bunch of oil and it won't fit anywhere in my Manhattan office.
You do understand that if enough speculators get wiped out it makes things harder on the producers/users of the commodity right?
Also to say it’s just speculators is a bit shortsighted as there very well could be and likely are folks that were hedging and need to roll and getting smashed doing it
Shale oil is finished, but of course they'll be bailed out and propped up.
What will happen to oil producing nations such as Russia and Saudi Arabia who rely on oil sales for the bulk of their revenue?
Saudi Arabia saw the writing on the wall a while back and has actually been trying to diversify its economy and become a conservative version of Dubai. Their cash reserves are also pretty substantial. I think Russia is in a lot more trouble here.
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