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Jeffreauxdawg

Jeffreauxdawg

All-American
Dec 15, 2017
8,891
8,003
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I know there was a thread about this before, but I just came across this article. Commodities trade future contracts on exchanges, but also have to be sold at actual market prices for physical delivery. A barrel of oil is now going for $2 in Texas and is about to go negative, because there is no where to actually put the oil... So you as the oil producer, will pay me the customer to take your oil.... Wild. Not a great business model. It's hard to make money at $40-50 a barrel.

My recommendation. Stay out of the little rinky dink oil stocks. Big.. big balance sheets are needed to survive this.

https://finance.yahoo.com/news/texas-oil-2-barrel-raises-120000398.html
 
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PineGroveBully

Redshirt
Nov 13, 2007
8,508
2
0
Jedd’s arse would still be stuck living in the swamp in a little cabin with his mother-in-law had he been about 60 years later.
 
kired

kired

All-Conference
Aug 22, 2008
7,150
2,578
113
I haven’t bought gas in 3 weeks. Have a ton of Kroger points going out end of April - gonna have to drive around just for the hell of it this week, so I can buy cheap gas
 
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RocketDawg

All-Conference
Oct 21, 2011
20,180
2,934
113
I haven't seen it quite that low here, but I haven't been out much either. The station I go to all the time, a Chevron, dropped from $1.899 to $1.599 just yesterday. Others around are around $1.50. I'm near a major Interstate though with still a lot of traffic, so get away from that and I'm sure prices are much lower.
 
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RocketDawg

All-Conference
Oct 21, 2011
20,180
2,934
113
How long can you store diesel? Do you need to put stabilizer in it like you do gasoline if you keep it very long?
 
DesotoCountyDawg

DesotoCountyDawg

Heisman
Nov 16, 2005
29,425
24,677
113
Yes they make a stabilizer and algae prevention. Under the right conditions you can store diesel for a year or even longer but it won’t last that long for us. We use at least 4 or 5 transport loads of diesel in a year.
 
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SheltonChoked

Redshirt
Feb 27, 2008
1,786
0
0
PineGroveBully said:
Jedd’s arse would still be stuck living in the swamp in a little cabin with his mother-in-law had he been about 60 years later.
Click to expand...

Jed would have been fine. You can shut down conventional wells and completions and restart them without too much trouble. But those Shale Frac Wells, you have to keep flowing them, or you lose the frac. If you are lucky, you could refrac later for an extra $10 million, if not you lost that well. ymmv

That's why they are keeping flowing, They don't want to lose the wells.

But it will bankrupt lots of the independents. But someone, with a lot of cash laying around, will come in and pick up the pieces. for pennies...
 
Jeffreauxdawg

Jeffreauxdawg

All-American
Dec 15, 2017
8,891
8,003
113
Oil (wti) is down another 13% tonight... Trading around $15.50.... may get below $10.00 in the next few weeks.

ETA. Contracts expire Tuesday and there is no storage. Explains a lot. June futures are still in the $20's in hope demand picks up.

I expect China to step in buy 50 million barrels tomorrow. Some sneaky secret storage facility... Or the make all their people hold 12oz of crude in their mouth indefinitely.*
 
Last edited:
Drebin

Drebin

Heisman
Aug 22, 2012
22,679
27,908
113
JoeLee'sSocks said:
Oil (wti) is down another 13% tonight... Trading around $15.50.... may get below $10.00 in the next few weeks.

ETA. Contracts expire Tuesday and there is no storage. Explains a lot. June futures are still in the $20's in hope demand picks up.

I expect China to step in buy 50 million barrels tomorrow. Some sneaky secret storage facility... Or the make all their people hold 12oz of crude in their mouth indefinitely.*
Click to expand...

I think the demand will spike when the country opens up. But it won't be immediate or drastic because the market has to overcome the issue with oversupply, and more people have to get back to work.
 
Jeffreauxdawg

Jeffreauxdawg

All-American
Dec 15, 2017
8,891
8,003
113
Drebin said:
I think the demand will spike when the country opens up. But it won't be immediate or drastic because the market has to overcome the issue with oversupply, and more people have to get back to work.
Click to expand...

Not picking on you, just curious... What is our definition of "the country opening up?" I think most people or at least half are going to be very hesitant for the first few weeks to get out and about too much.

I know our governor is trying to open Texas up, but in Dallas Friday and Saturday cases were still climbing to highest levels so far. It ticked down a bit (104 new cases) yesterday, but Sunday/Monday reports are always low. I think most people here are going to be a little cautious.

So back to the question, how long will it be until the country is open... Does that mean you are allowed to do something? Is it when employees that are telecommuting go back to the office, restaurants have waits on Friday night, and TSA agents are pissy again because they have full lines? Or is it somewhere in between?

Not throwing stones, I am honestly just trying to get an idea on sentiment.
 
Drebin

Drebin

Heisman
Aug 22, 2012
22,679
27,908
113
JoeLee'sSocks said:
Not picking on you, just curious... What is our definition of "the country opening up?" I think most people or at least half are going to be very hesitant for the first few weeks to get out and about too much.

I know our governor is trying to open Texas up, but in Dallas Friday and Saturday cases were still climbing to highest levels so far. It ticked down a bit (104 new cases) yesterday, but Sunday/Monday reports are always low. I think most people here are going to be a little cautious.

So back to the question, how long will it be until the country is open... Does that mean you are allowed to do something? Is it when employees that are telecommuting go back to the office, restaurants have waits on Friday night, and TSA agents are pissy again because they have full lines? Or is it somewhere in between?

Not throwing stones, I am honestly just trying to get an idea on sentiment.
Click to expand...

I think that my definition of the country opening up is easing of lockdown restrictions. I understand that it's not a flip of the switch and it's going to be phased in. I also agree that when all of this is over, some people will fundamentally change how they interact in public. But I think all of this talk of people being hesitant to get back to normal is not accurate. People will rush to get out. Hell, it's already happening and we're supposed to be locked down. If you've driven down goodman road in Desoto County lately, you'd see that.
 
Jeffreauxdawg

Jeffreauxdawg

All-American
Dec 15, 2017
8,891
8,003
113
Drebin said:
I think that my definition of the country opening up is easing of lockdown restrictions. I understand that it's not a flip of the switch and it's going to be phased in. I also agree that when all of this is over, some people will fundamentally change how they interact in public. But I think all of this talk of people being hesitant to get back to normal is not accurate. People will rush to get out. Hell, it's already happening and we're supposed to be locked down. If you've driven down goodman road in Desoto County lately, you'd see that.
Click to expand...

Fair enough. Thanks for the input. I mostly talk to people in bigger cities... Dallas, LA, Boston, and NYC. Everyone I talk to is nervous because it's a lot harder to keep your distance. As much as Olive Branch and Southaven have grown, it's still spread out relatively speaking. It's probably just the bigger cities that will have the hesitation.

Now we just have to get people that are making more on unemployment to go back to work for less money.*
 
R

RocketDawg

All-Conference
Oct 21, 2011
20,180
2,934
113
CNN says oil is now negative - they're paying people to take the oil because there's nowhere for the producers to store it.
 
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SheltonChoked

Redshirt
Feb 27, 2008
1,786
0
0
DesotoCountyDawg said:
Yes they make a stabilizer and algae prevention. Under the right conditions you can store diesel for a year or even longer but it won’t last that long for us. We use at least 4 or 5 transport loads of diesel in a year.
Click to expand...

Just keeping it cool and dry and you'll get a 6 months to a year storage... add biocide and a stabilizer and you can store it for up to 5 years...

make sure you have a good filter before you use it, to get out any crud...
 
karlchilders.sixpack

karlchilders.sixpack

All-Conference
Jun 5, 2008
21,176
4,944
113
As I hear it

the middle man, speculator is getting squeezed.

He is buying to resale, and does not have the facility to take the oil,

so he has to lay it off, anyway that he can.
 
E

ezsoil

Junior
May 26, 2013
1,352
285
83
I owned a small production company and sold out to my partners last year ...wow I'm glad I did ..... this will take years to recover...
 
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EagleDawg97

Senior
Oct 18, 2015
810
586
23
Crazy times for sure. My understanding is this is the first time in the history of oil futures trading it has gone negative. Pay attention folks because chapters of history and economics books will be written about this.
 
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DoggieDaddy13

All-Conference
Dec 23, 2017
3,992
2,378
113
There won't be many rinky dinks left in 2021 and that's gonna suck really bad for soooooo many reasons.

Bail outs are coming, but the small companies won't get much if any.
 
Xenomorph

Xenomorph

Heisman
Feb 15, 2007
16,166
10,764
113
Pull up to the pump. Tell the attendant.. "I'll fill up this F250 if you'll pay me $50.00 cash!"
 
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