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Honored Social Butterfly

U.S. Oil Prices Plummet

 US Oil Prices on pace for their worst day ever as storage runs out

The May contract of U.S. West Texas Intermediate (WTI) futures fell to $11.66 a barrel on Monday, down more than 36%. It means the price grade is on track to register its worst day back to contract inception in 1983.

Honored Social Butterfly

   Here is a KISS explainer article on how Future Market works and why this is a BFD....especially as once a well stops pumping, it does not start again with a flip of a switch.

 

https://talkingpointsmemo.com/news/coronavirus-oil-prices-negative-explainer

PRO-LIFE is Affordable Healthcare for ALL .
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Honored Social Butterfly

Does this mean when I fill up my car at the gas station they'll pay me?

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Honored Social Butterfly

WE, meaning the collective tax payers now OWN more debt than is the entire US GDP, as the FED is buying up any and all debt, especially oil companies?  

 

relates to U.S. Debt to Surge Past Wartime Record, Deficit to Quadruple

 

   Once upon a time the GOP whined about the amount of debt being passed on to future generations....those people are now the same ones who are doing this.   

PRO-LIFE is Affordable Healthcare for ALL .
Honored Social Butterfly

Oil continues unprecedented sell-off: June futures drop 39%, but May contract turns positive

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Honored Social Butterfly


@CriticalThinking wrote:

 US Oil Prices on pace for their worst day ever as storage runs out

The May contract of U.S. West Texas Intermediate (WTI) futures fell to $11.66 a barrel on Monday, down more than 36%. It means the price grade is on track to register its worst day back to contract inception in 1983.


Right you are, CeeTee.  Aren't you pleased at the GREAT DEAL trump made with the Russians and Saudi's?  Great for US oil production....

 

 

 


"FAKE 45 #illegitimate" read a sign at the Woman's March in DC, 1/27/2017
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Conversationalist

Trump joins OPEC & OPEC plus cartel to help marginal fracking firms, but mainly to help ZombieBanks loaded with fracking debt. Don serves Russia & SaudiArabia.
Losers are US motorists, commuters, delivery services, Farmers, Truckers, taxi drivers!

 

https://www.usatoday.com/story/opinion/todaysdebate/2020/04/16/coronavirus-crisis-why-donald-trump-i...

 

 

Honored Social Butterfly

These are oil contracts set to come to term shortly. That means it was agreed months ago that the oil would be delivered in the next few weeks. With everything shut down, it would be difficult to take delivery (you have to put this stuff in storage tanks) and demand is pretty close to zero so nobody wants to purchase one of these contracts. If you are a futures investor in NYC, you never planned to take delivery so you must get rid of the contract and the underlying oil.  Futures contracts for a month or so out are priced more in line with historic prices.

 

I am just amazed that the regressives are not crowing about what a great job Trump has done in lowering oil prices to lower gasoline prices.  After all, isn't gassing up that F 150 with the Confederate flag in the back all that matters?

Honored Social Butterfly

U.S. Oil Prices Plummet

 

Last I heard they were down to zero.

 

https://www.everythinglubbock.com/news/local-news/oil-prices-crash-on-monday-wti-hits-zero/ 

 

Oil prices crash on Monday, WTI hits zero, Texas braces for economic impact

 

I don't get it, must be something going on, can't be the virus, Trump said that is fake news.

 

Crude oil price plunges below zero for first time in unprecedented wipeout

 

 

Honored Social Butterfly

I read a book by Matt Taibbi (Griftopia) where he devoted one chapter to the Commodities Market. As I recall, even though supply and demand plays a big role in the price of commodities, too many speculators can throw things out kilter and cause extreme fluctuations in the Commodities Market. 

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Honored Social Butterfly


@gordyfl wrote:

I read a book by Matt Taibbi (Griftopia) where he devoted one chapter to the Commodities Market. As I recall, even though supply and demand plays a big role in the price of commodities, too many speculators can throw things out kilter and cause extreme fluctuations in the Commodities Market. 


How right you are. It was the speculators who ended any free market some years ago. They turned it into a casino.

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Honored Social Butterfly

How right you are. It was the speculators who ended any free market some years ago. They turned it into a casino.

~~~~~~~~~~~~~~~~~

Exactly. They turned it into a casino. 

 

In the book, the chapter on commodities was the one chapter I had a difficult time understanding. I had believed it had ALL depended on supply and demand. 

I was confused enough that I Googled Commodities. Most people it seems, focus strictly on supply and demand to account for oil prices. There were, however, some who wrote stories about how the "speculators" betting on the price of commodities influence the price.

 

From the book "Griftopia"...

 

"All the way back in 1936, after gamblers disguised as Wall Street brokers destroyed the American economy, the government of Franklin D. Roosevelt passed a law called the Commodities Exchange Act that specifically designed to prevent speculators from (messing) around with the prices of day-to-day necessities like wheat and corn and soybeans and oil and gas. These commodities suffered serious manipulations back then....the system worked more or less perfectly for about 50 years....Wall Street financial companies began buying up stakes in trading firms that held seats on the various commodities exchanges. One of the first came in 1981 when Goldman Sachs bought up a commodities trading company called J. Aaron."

 

De-regulations ensued. Loopholes created.

 

"They created a new kind of investment vehicle, a new table at the casino, as it were....There were two main indices that investors could bet on. One was the GSCI (Goldman Sachs Commodities Index)"...

 

S&P GSCI (Wikipedia)...

 

https://en.wikipedia.org/wiki/S%26P_GSCI

Conversationalist

Correct.

It is Absolutely a Casino economy, and has been since the 1980’s.

Speculation has a higher priority than production.

 

Remember: Today’s Economic-Financial Crisis Started With Collapse Of Repo Market In

Mid-September 2019, Long Before Corona Crisis; Some Wall Street Zombie Banks Are Now Choked With Over $50 Trillion Each In Toxic Derivatives, And Fed Is Busily Buying Poisonous CDOs And CDS For Its Balance Sheet; Derivatives Were Outlawed In US From 1936 Until Reagan Years; If Derivatives Cancer Is Not Excised, It Will Absorb Bailout Money And Cripple Recovery; Only Alternative Is To Re-Outlaw Most Derivatives, And Levy A Wall Street Sales Tax On The Rest.

 

 

[If you want a very simple overview of derivatives, you might want to see the movie, "The Big Short".]

 

Honored Social Butterfly

Yes, when the Fed began pouring money into the Repo Market red flags should have gone up.

While Reagan gave us derivatives, Bill Clinton gave us credit default swaps, which was the biggest culprit of the 2008 financial crisis. Just ask AIG.

 

I also saw the movie "The Big Short". I thought they did a good job in making that movie.

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Honored Social Butterfly

A few years ago, tne price for a barrel of oil was going up every week. Each time the cost rose for a barrel of oil, the price at your gas station also went up. 

 

I happened to watch a documentary on the oil companies. The documentary made it very clear that it takes a minimum of 6 weeks for a new barrel of oil to reach the oil refinery and get processed into gasoline. I thiought that was fascinating.

 

That meant, if the price for a barrel of oil went up $10 today, tomorrow the price of gas at your station also went up. However, the new and more expensive oil wouldn't arrive at your gas station for at least 6 weeks.

Honored Social Butterfly

about the biggest downside to all of this virus news is the environment. People in cities all over the world and here in the U.S. have got MUCH CLEANER AIR because of so many less drivers. Once this virus has passes I hope we can get on to seriously tackling climate change.
Honored Social Butterfly

I understand things are getting so dire for the oil companies they are actually thinking about laying off a few GOP congressman

Honored Social Butterfly

now thats DIRE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Honored Social Butterfly

   Price of gas in San Antonio in the $1.44 range.    Texas Railroad Commision was approached by numerous Oil Companies and has admitted that it has no effing idea of what to do.   No institutional knowledge. - Republicans have owned the State House for decades.   

PRO-LIFE is Affordable Healthcare for ALL .
Honored Social Butterfly

Wow, that's crazy.   I went to the gas station last week for the first time in a month.   I paid $2 a gallon, when we usually pay about $2.90.   A few days later, a friend went to Costco and said gas was 0.94 cents a gallon for her. 

Honored Social Butterfly

Yes prices of gasoline have dropped but do not match the new costs the Oil Cos. have. I live in oil country and they say it costs the Cos. between $8.00, and $10.00 to pump a barrel from the well. That has not changed. We used to pay about $2.75 per gallon, now we pay about $2.15. There are places in my State close to $1.00 per gallon. Have no fear the oil Cos. are still making money. Now the real problem. TRUMP. He now heads OPEC and wants to get prices back to $4.00 to $5.00 per gallon. Who would have ever thought a President of the USA would be the driving force behind the Oil Cos. increasing prices. If we had a free market like the far right enablers are always talking about we would all be paying less. Free markets to the far right and Trump only applies when they can make tons of money. Trump keeps his record at 100%. Trump destroys everything, and everyone he touches, and now it is the Oil Cos. turn to learn that lesson.

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