Negative oil prices

youtu.be/cd4-UnU8lWY

Attached: A6703A6A-66D7-4247-AF05-466CC21E8CAB.jpg (800x450, 156.89K)

Why people are not freaking about this?

It's not the Doomish for America only: it's literal doom for the Russia, Saudi Arabia and other countries whose main bulk of income is from oil and petroleum products

If the price does not correct soon you will looking revolutions and extreme destabilization in various countries. Even $6 dollars a barrel is not enough, no government would make profit by selling oil $6 dollars a barrel considering the amount of money and energy goes to produce oil

This isn't the price of oil you retards. It's the price of storage contracts.
sage

The one way it would decrease in cost is if companies ramp up petrol/diesel production or if new companies start to take advantage of cheap crude.

Russian oil prices aren't related to WTI and much less Louisiana Light. Russian oil is selling at $16.

Gas tax. It’s a nominal tax at a fixed $0.XX/gallon, regardless of the price of gasoline. In states like Pennsylvania you’re paying $1/gallon in tax so you’ll never see gas below $1, whereas you could see it for $0.60 in Texas. Thank Democrats. The federal gas tax is less than 30 cents but some states are full retard on it.

All Russia and KSA have to do to raise the price is to start launching missiles at each other

>go in a slapping match with the saudies
>both produce near maximum
>overflow world refineries
>overflow world stock piles
>people do not want your oil anymore
>pay people to take it away
>complain

Truly, oil countries are ran by utter retards.

This just reflected the market correcting fast to the production shutdown. People held too many oil futures, which mature to a literal shipment of oil, and could not sell them before expiry like they normally do.
So, people only playing the market faced actual storage of oil shipped to Oklahoma, and they did not want to sort out renting a tank and dealing with all that, so they literally paid people to take the oil out of their hands.

Not likely to happen when people prepare for the appropriate demand.

Plus, the US already holds decades worth of oil in storage.

Good chunk of consumer prices of fuel are tax. That is kinda fixed and actually way lower in US than it should be, it was supposed to be adjusted according to inflation, but hasn't been done for decades due it pretty much would have cause riots from US middle class.

The negative or almost free crude oil is about producers losing ability to store it. For the storage facilities and refineries, major drop in production would cost more money that just dumping it on market at this point. The lockdowns have reduced sales that much temporarily. This where how much cash oil companies have at hand becomes important. Do they have enough dough to ride out uncertainty for few months. A lot of those companies might not have, mostly because they might have paid too much of their profits to shareholders without maintaining adequate cash reserve for the company.

There is temporary lack of demand that lasts as long as major lockdown measures continue.

youtube.com/watch?v=ZiUmM9n7OaI

I dunno man every week that I go to fill my tank it drops another 5-10 cents per gallon, and this was before the latest crash.

I filled up for fucking $13, cant wait for a $6 tank of gas soon.

Attached: 20200419_163041.jpg (4032x3024, 3.58M)

>Plus, the US already holds decades worth of oil in storage.
Can we add more to the Strategic Oil Reserve or is that starting to get full as well?

>Can anyone explain why gas isn’t pennies per gallon?
The negative price is due to contracts for delivery being traded. Demand for refined fuels is way down so the amount of oil used is also down. But people that buy and sell oil had already agreed to buy oil in the past and now need to take delivery of it but have no place to put it. So the producers for oil can buy back their delivery contracts and get paid twice. Once when they sold the contract back in Jan and again yesterday on the open market; buying their product they sold for negative money, getting paid to not deliver it.

Gas however is as expensive as it is because while oil can be the largest cost of a refinery that's not the only cost. When oil was $100 a barrel that drove the price of gas, when it's $20 the efficiency and energy use of the refinery drives that cost. If you have looked, while low historically the price of natural gas which is used for both energy (heat/electricity) and as feed stock hasn't moved that much in the last 2 months. So only one aspect of the price of gas has dropped. That's why gas is only half as much as it was 3 months ago and not 5% as much.

Attached: 1554385927308.jpg (750x562, 64.77K)

>I filled up for fucking $13, cant wait for a $6 tank of gas soon.
Cool beans. I haven't filled up my car in a while, so I'll be in for a pleasant surprise for next month's grocery run. Even up here in the mountains the gas is stupid cheap now. Reminds me when I used to live back in the South.

How does that make any sense? Will the lack of trillions somehow starve them and prevent them from existing?

>other countries whose main bulk of income is from oil and petroleum products
Canada - notice no leaf posts

If a country destabilizes because of lack of money, it was not stable to begin with.

>If a country destabilizes because of lack of money, it was not stable to begin with.
Russian economy has been in shitter for a while due to low oil price. US troops in Saudi Arabia are there to secure the ruling family.

In order to take a shipment of oil you need a way to store it. The futures contracts were due yesterday so the oil was pumped to Cushing where all the oil in America comes from. But there's no demand and everyone is full to the point that they are having to store the oil in the pipelines themselves. So, the people holding futures contracts literally had to pay people to take the excess oil and store it.

Tldr there's so much oil you can't give it away

Peter Zeihan says
>Canada’s Alberta province has the most to lose. Not only landlocked, it must sell all its oil into the American market that is already so saturated. Its production must be shut in for years.
>Venezuela was facing civilizational collapse due to mismanagement before oil prices tanked. As oil is the government’s only remaining income stream, this marks the end of Venezuela as a country. Its oil will not come back for at least a decade, and even then only if an outside power first physically invades the place to rebuild the country from scratch.
>America’s sanctions regime against Iran has been so successful the country isn’t an oil exporter any longer. Its output will absolutely collapse this summer, and the country lacks the funds to bring in foreigners to help restart it or the skills to do the work itself.
>Russian fields are in swamps and permafrost. Drilling is only possible during the winter. Any shut-ins means the wells freeze solid, necessitating completely new drilling. Last time this happened it took the Russians nearly 15 years to get production back.
>Azerbaijan and Kazakhstan are both dependent upon other countries (in some cases, Russia) to transit their crude to market. High production costs plus finicky neighbors equals long-haul shut-ins.
>Nigeria is a mess on a good day, and the supermajors who have made Nigerian output possible have steadily moved offshore to get away from the chaos and violence. Once they turn off their wells, they won’t even consider returning until global prices rise to the point that they are once again willing to subject their staff to frequent kidnapping. That’s several years off.
>Iraq has been in a state of near civil war for some 15 years. The country is now producing over 4mbpd, the income of which helps hold the place together. Negative prices will remove the “near” from the country’s political condition and make the place a ward of the Arab states of the Persian Gulf.