Negative Oil?

[tsptalk]

Sorry, I had to give this its own thread because of the the short-term insanity.

I'm not sure what is going on... That is the May futures contract. June is still $20 a barrel right now.

https://www.cnbc.com/quotes/?symbol=@CL.2

https://www.cnbc.com/quotes/?symbol=@CL.1

 

[Rod]

Re: Nickle Oil?

Crazy. Too bad it's not Brent.

 

[tsptalk]

Re: Nickle Oil?

[h=1]An oil futures contract expiring Tuesday went negative in bizarre move showing a demand collapse[/h]https://www.cnbc.com/2020/04/20/oil...res-in-focus-as-coronavirus-dents-demand.html

 

[weatherweenie]

Trying to shine a turd:
[h=1]This oil price crash isn’t as bad as it seems — here’s why[/h]
https://www.cnbc.com/2020/04/20/this-oil-price-crash-isnt-as-bad-as-it-seems-heres-why.html

 

[Bullitt]

Spot price is still above $20. Subsidies for electric cars and solar power don't make any more sense today than 10 years ago.

How much of this selling has to do with contract rollover?

Too bad it's not Brent.

Agree with that, but I'm sure some people in the US would support sending financial aid if it was Brent.

Dianne Feinstein of California, a member of the Senate's intelligence and appropriations committees, said she was "disappointed" that the White House intends to block Tehran's request for funds.


"Providing these funds to Iran would help it respond more effectively to the disease and mitigate the risk of further destabilisation in the region," Feinstein said

https://www.middleeasteye.net/news/...tor-urges-trump-approve-iran-imf-loan-request

 

[Bullitt]

This bodes extremely well for AMZN, FDX, UPS, etc. if this translates to collapsing gasoline prices.

 

[bmneveu]

This bodes extremely well for AMZN, FDX, UPS, etc. if this translates to collapsing gasoline prices.

I would think any transport or industry that has a heavy energy expense should benefit greatly from these oil prices. But, today we see the air and cruise lines down again. They are so beat up though that I'm not sure these companies can afford to buy up large amounts of oil at this time. That and their storage is probably already full, as oil prices have been falling for so long now, they probably thought they had a steal a month ago and loaded up.

 

[tsptalk]

May contracts back above $0. June is now getting crushed, down 24% today.

https://www.cnbc.com/quotes/?symbol=@CL.1

https://www.cnbc.com/quotes/?symbol=@CL.2

 

[Bullitt]

we see the air and cruise lines down again.

Those two industries are toxic, reliant on government bailouts after decades of being poorly run.

Spot prices are in the teens. I'm wondering about the ripple effects of all the credit default swaps being triggered when companies actually do collapse. Will the institutions who insured them be able to pay out? I doubt it.

CHK, RIG, DO won't be surviving this rout. All 3 were such darlings to own in the 2008 oil run.

 

[weatherweenie]

[h=1]US Oil Fund, popular ETF trading under ticker ‘USO,’ plunges 38%, halted for trading at one point[/h]

 

[tsptalk]

US Oil Fund, popular ETF trading under ticker ‘USO,’ plunges 38%, halted for trading at one point

Yet the XLE is down just 0.58%. Weird stuff.

 

[Bullitt]

I'm sure they'll just do a few more reverse splits in USO and while they're at it, UNG. What a failed investment product.

Here we go. Remember when the MBS market collapsed and we found out all the companies running blatant frauds? Here's one for the oil market. $800 million in unaccounted derivative losses.

HSBC, ABN Amro and Société Générale are among a group of banks owed almost $4bn by Hin Leong, the Singapore oil trader scrambling to restructure its finances as a brutal downturn hits energy markets.

HSBC has the biggest exposure to Hin Leong at $600m, followed by ABN Amro at $300m, while Société Générale has lent the company $240m. In total, around two dozen banks are owed $3.85bn by the company.

https://www.ft.com/content/437b8e53-b6a6-4247-8340-0d5860706bd8

 

[tsptalk]

Kelly Evans: Oil to -$100 a barrel?

“Will we hit -$100 a barrel next month? Quite possibly,” [Paul Sankey] warns. “If you had a stinking barrel of oil in your back yard, would you pay someone $100 to take it away? Yes, and you would probably be relieved you were not charged $300. That is the situation we are in.”

https://www.cnbc.com/2020/04/21/kelly-evans-oil-to--100-a-barrel.html

 

[Bullitt]

Was just thinking that. Eventually oil will be used again, what happens when the producers can't get their production back?

I'd like to think our SPR is being filled to capacity here.

 

[Bullitt]

OIL. Shut down, liquidated. This was the ETN. ETN's don't even hold shares (like ETF's) and are just a giant shell game; a grand experiment concocted in 2008 or so when MBS, CDO's, SIV's were hugely popular amongst the scammers.

Weatherweenie, you may have been right on USO. Total POS. No value to shareholders since inception.

Note: The United States Oil ETF (USO) just announced that it has halting all new creations of shares. It could be the next to eventually shut down.

https://www.thestreet.com/etffocus/...est-oil-etns-will-be-shut-down-and-liquidated

 

[Bullitt]

Disregard USO going under. Reverse split. 1 to 8.

https://www.streetinsider.com/Corpo...he+United+States+Oil+Fund+(USO)/16770302.html

For laughs, take a look at a long term chart to see how many times it has been reverse split.

 

[Bullitt]

June contract expires this afternoon. Doesn't look like it will be closing negative.