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Offline RE

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Re: Oil Price Crash: Who Cooda Node?
« Reply #960 on: March 18, 2020, 02:10:23 PM »
Demand destruction.

I can't remember the last time we had gas this cheap....but according to the internet....looks like it was about 2003 sometime.

Screen Shot 2020 03 18 at 3 08 45 PM
Screen Shot 2020 03 18 at 3 08 45 PM

So ends the Age of Oil.

RE
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Offline Surly1

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Re: Oil Price Crash: Who Cooda Node?
« Reply #961 on: March 18, 2020, 02:31:10 PM »
Demand destruction.

I can't remember the last time we had gas this cheap....but according to the internet....looks like it was about 2003 sometime.

Screen Shot 2020 03 18 at 3 08 45 PM
Screen Shot 2020 03 18 at 3 08 45 PM

So ends the Age of Oil.

RE

Look out below. Death for the frackers, and look forward to $10 oil.

Oil Falls Again on Saudi Plans to Increase Crude Exports 43%
A full-on war for market dominance just got escalated by Saudi Arabia's plans to further flood the world with excess crude oil.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline RE

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Re: Oil Price Crash: Who Cooda Node?
« Reply #962 on: March 18, 2020, 02:36:54 PM »
Demand destruction.

I can't remember the last time we had gas this cheap....but according to the internet....looks like it was about 2003 sometime.

Screen Shot 2020 03 18 at 3 08 45 PM
Screen Shot 2020 03 18 at 3 08 45 PM

So ends the Age of Oil.

RE

Look out below. Death for the frackers, and look forward to $10 oil.

Oil Falls Again on Saudi Plans to Increase Crude Exports 43%
A full-on war for market dominance just got escalated by Saudi Arabia's plans to further flood the world with excess crude oil.


$10/bbl Oil leads to still more Demand Destruction as fewer Happy Motorists still can afford to buy it.  Then without the economies of scale that refineries need, the industry as a whole collapses.

RE
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Offline Surly1

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Re: Oil Price Crash: Who Cooda Node?
« Reply #963 on: March 18, 2020, 02:59:25 PM »
Demand destruction.

I can't remember the last time we had gas this cheap....but according to the internet....looks like it was about 2003 sometime.

Screen Shot 2020 03 18 at 3 08 45 PM
Screen Shot 2020 03 18 at 3 08 45 PM

So ends the Age of Oil.

RE

Look out below. Death for the frackers, and look forward to $10 oil.

Oil Falls Again on Saudi Plans to Increase Crude Exports 43%
A full-on war for market dominance just got escalated by Saudi Arabia's plans to further flood the world with excess crude oil.


$10/bbl Oil leads to still more Demand Destruction as fewer Happy Motorists still can afford to buy it.  Then without the economies of scale that refineries need, the industry as a whole collapses.

RE

'I think you are nuts.

Saudi has enough capacity to fill tankers, haul them offshore and burn them and their cargoes like so many flaming sky lanterns. Call it a celebration of the reign of Crown Prince Bone Saw.
At $10 the Saudis are the last man standing, and they can still buy up the wreckage of shale oil for a nickel on the dollar if they would want. Which they wouldn't.

Of course, you've said China is toast for years, too. Often wrong but never in doubt.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline RE

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Re: Oil Price Crash: Who Cooda Node?
« Reply #964 on: March 18, 2020, 03:20:17 PM »

'I think you are nuts.

Saudi has enough capacity to fill tankers, haul them offshore and burn them and their cargoes like so many flaming sky lanterns. Call it a celebration of the reign of Crown Prince Bone Saw.
At $10 the Saudis are the last man standing, and they can still buy up the wreckage of shale oil for a nickel on the dollar if they would want. Which they wouldn't.

Of course, you've said China is toast for years, too. Often wrong but never in doubt.

I think you need to work on Wall Strret for a couple of years.

RE

https://www.foxbusiness.com/markets/oil-price-could-fall-below-zero-analyst

Oil prices could fall below zero: Analyst
Crude surplus could overwhelm global storage


By Jonathan GarberFOXBusiness
Oil ‘could go considerably lower’: The Schork Report publisher

The Schork Report Publisher Stephen Schork discusses his outlook for the oil markets.

Plunging oil prices could be headed a lot lower – possibly below zero, according to one Wall Street analyst.

West Texas Intermediate crude oil, the U.S. benchmark, fell by more than 10 percent Wednesday to near $24 a barrel, a level last seen in April 2002.

“Oil prices can go negative,” wrote Paul Sankey, managing director at Mizuho Securities.

CORONAVIRUS CHOKEHOLD ON US WORSENS OIL INDUSTRY'S PAIN

The COVID-19 pandemic has brought the U.S. and global economy to a standstill by prompting “shelter in place” orders, social distancing between people and the cancellation of non-essential travel. The sharp slowdown in economic activity has curtailed the need for oil.

If that weren't enough, Saudi Arabia recently slashed oil prices and raised output after Russia refused to join OPEC in deepening production cuts.

Oil is a 100 million barrel-per-day market, but Sankey says it’s possible that the economic fallout from the pandemic could zap demand, creating a 20 million barrel-per-day surplus.

He says the “physical reality” of the market is that oil is pumped out of the ground and has to be consumed or stored. When the cost of storage goes high enough -- or space runs out -- companies might pay customers to take it.

For now, President Trump has ordered the Department of Energy to take advantage of low prices by stepping into the market and buying oil for the Strategic Petroleum Reserve.

The reserve can build at 2 million barrels per day, meaning that it has four months until it’s at capacity, Sankey said.

By then, he added, high-cost oil from the Bakken shale formation in the U.S. or bitumen from the Canadian oil sands, "prices negatively because it exceeds needs" and requires storage, Sankey wrote. “Negative prices are simply a higher cost of storage than market.”

Sankey isn’t the only one on Wall Street who is sounding the alarm about the coming flood of oil.

Excess supply from OPEC and Russia, coupled with crumbling demand "are leading to concerns about a surplus that could overwhelm global storage,” wrote Francisco Blanch, a commodity strategist at Bank of America.

He warns the demand destruction caused by COVID-19 and the price war between Saudi Arabia and Russia could cause inventories to swell by 900 million barrels in the second quarter alone. He estimates the world currently has about 1.5 billion barrels of available storage.

Blanch’s worst-case scenario isn’t as dire as Sankey’s.
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Offline monsta666

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Re: Oil Price Crash: Who Cooda Node?
« Reply #965 on: March 18, 2020, 03:26:25 PM »
Saudi has enough capacity to fill tankers, haul them offshore and burn them and their cargoes like so many flaming sky lanterns. Call it a celebration of the reign of Crown Prince Bone Saw.
At $10 the Saudis are the last man standing, and they can still buy up the wreckage of shale oil for a nickel on the dollar if they would want. Which they wouldn't.

Of course, you've said China is toast for years, too. Often wrong but never in doubt.

Perhaps the cost of oil extraction would still be profitable at $10 a barrel (I have doubts this is true) but the issue for Saudi Arabia is that oil revenue must be used to pay for government expenses. The Saudi's will not generate sufficient income to meet those expenditures at $10 a barrel. I suppose somewhat ironically if they take lots of social distancing measures to curb Covid-19 spread then this could help as such actions would curtail internal oil consumption meaning they could export more oil. In short though the Saudi government will suffer if prices remain what they are for any sustained period of time. I am talking $30 here nevermind the $10 mark.

Offline Surly1

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Re: Oil Price Crash: Who Cooda Node?
« Reply #966 on: March 19, 2020, 05:10:33 AM »
Saudi has enough capacity to fill tankers, haul them offshore and burn them and their cargoes like so many flaming sky lanterns. Call it a celebration of the reign of Crown Prince Bone Saw.
At $10 the Saudis are the last man standing, and they can still buy up the wreckage of shale oil for a nickel on the dollar if they would want. Which they wouldn't.

Of course, you've said China is toast for years, too. Often wrong but never in doubt.

Perhaps the cost of oil extraction would still be profitable at $10 a barrel (I have doubts this is true) but the issue for Saudi Arabia is that oil revenue must be used to pay for government expenses. The Saudi's will not generate sufficient income to meet those expenditures at $10 a barrel. I suppose somewhat ironically if they take lots of social distancing measures to curb Covid-19 spread then this could help as such actions would curtail internal oil consumption meaning they could export more oil. In short though the Saudi government will suffer if prices remain what they are for any sustained period of time. I am talking $30 here nevermind the $10 mark.

I am sure you're right. My "$10" figure was hyperbole. Difficult to imagine it would/could sink that far. Today's prices range from 22-30, although Oil Price says that April Could Be Worst Month Ever For Oil.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline JRM

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Re: Oil Price Crash: Who Cooda Node?
« Reply #967 on: March 19, 2020, 05:21:37 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline azozeo

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Re: Oil Price Crash: Who Cooda Node?
« Reply #968 on: March 19, 2020, 05:27:40 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?


These are the good old days  :coffee:

<a href="http://www.youtube.com/v/4NwP3wes4M8&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/4NwP3wes4M8&fs=1</a>
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Offline Eddie

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Re: Oil Price Crash: Who Cooda Node?
« Reply #969 on: March 19, 2020, 05:44:19 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?

I dropped two original articles here yesterday. Why don't your write something about PO, if you're interested?  The rest of us understand that the equation is simple.

At these prices most oil producers go broke. The Saudi Crown Prince has more money than God, and he can afford to flood the market with cheap oil for a while, to see if he can kill all the competition. In the long run, he has a problem (Saudi oil is finite), but he has the shekels, for the moment.

Putin also has lots of leeway in being able to ride out a price war.

American shale oil frackers are kaput at these prices...unless the government bails them out......which is the next thing...it will happen.
« Last Edit: March 19, 2020, 06:04:25 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

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Re: Oil Price Crash: Who Cooda Node?
« Reply #970 on: March 19, 2020, 05:47:02 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?


These are the good old days  :coffee:

<a href="http://www.youtube.com/v/4NwP3wes4M8&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/4NwP3wes4M8&fs=1</a>

<a href="http://www.youtube.com/v/y3KEhWTnWvE" target="_blank" class="new_win">http://www.youtube.com/v/y3KEhWTnWvE</a>

RE
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Offline Surly1

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Re: Oil Price Crash: Who Cooda Node?
« Reply #971 on: March 19, 2020, 05:57:14 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?

Well hang on and strap in. You never know what blog post or news article is going to spark that sort of discussion, and they do still happen. What you are seeing now is the Forum being peppered with what are, in effect, dispatches from the front. The "first draft of history," if you will. As I wrote elsewhere, "this is either the BIG ONE or it is NOT the BIG ONE." But it's pretty fucking big, as plagues go. Big enough to bring the world economy to its knees.

There is so much to learn and react to in the course of a day. One of the things I rely upon is that  group of people from all over with different foci and POVs post things here which in many cases I would not otherwise see. And I see a LOT in the course of the day.

We've already got plague and locusts; I'm waiting for frogs and boils as well.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline Surly1

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Re: Oil Price Crash: Who Cooda Node?
« Reply #972 on: March 19, 2020, 06:09:11 AM »

At these prices most oil producers go broke. The Saudi Crown Prince has more money that God, and he can afford to flood the market with cheap oil for a while, to see if he can kill all the competition. In the long run, he has a problem (Saudi oil is finite), but he has the shekels, for the moment.

Putin also has lots of leeway in being able to ride out a price war.

Oil Price agrees with that last: https://oilprice.com/Energy/Energy-General/Russia-Needs-Higher-Prices-But-Wont-Give-An-Inch.html

Both Bone Saw and Putin are playing the Long Game in stark contrast with their American marks, who along with just-in-time delivery are fixated on just-in-time results for the next quarter. Both MBS and Putin are thinking in decades. To say nothing of the Chinese, who are sending equipment and specialists abroad to help treat coronavirus, flexing their soft power muscles in a way the US used to do before the xenophobes took charge.

American shale oil frackers are kaput at these prices...unless the government bails them out......which is the next thing...it will happen.

Count on it. All in the name of "preserving American energy independence" or some other Stephen-Miller-authored turn of phrase guaranteed to put a heart in the eye of the most gullible redneck.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline JRM

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Re: Oil Price Crash: Who Cooda Node?
« Reply #973 on: March 19, 2020, 06:45:15 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?

I dropped two original articles here yesterday. Why don't your write something about PO, if you're interested?  The rest of us understand that the equation is simple.

At these prices most oil producers go broke. The Saudi Crown Prince has more money than God, and he can afford to flood the market with cheap oil for a while, to see if he can kill all the competition. In the long run, he has a problem (Saudi oil is finite), but he has the shekels, for the moment.

Putin also has lots of leeway in being able to ride out a price war.

American shale oil frackers are kaput at these prices...unless the government bails them out......which is the next thing...it will happen.

Mornin' Eddie.  Yes, of course I see these obvious implications.  When you say, "The rest of us understand that the equation is simple," you seem to be dismissing me as ignorant.  But what I'm interested in is not what you say, but what the implications of what you say are likely to be, and the dialogue which would ensue were we to actually discuss THOSE implications.

Mostly, I'm interested in knowing what the probability of a radical and rapid collapse of the global financial system may be, so I can put some sort of a handle on what I might do as a community organizer / activist who has decided to stay in my little city and not flee it for a cave in the wilderness.  Are we now in the next Great Depression, as it seems to me? Only worse than the last one.  It helps to discuss these sorts of questions, rather than going out on a limb all on one's own.  After all, I'm going to be playing an advisory role in my local community. I had better not get it too wrong, either direction, either in the direction of inadequate response or an overblown one. But I like to err on the side of safety, of course!
« Last Edit: March 19, 2020, 06:49:36 AM by JRM »
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline JRM

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Re: Oil Price Crash: Who Cooda Node?
« Reply #974 on: March 19, 2020, 06:55:07 AM »
I'm missing the Diner of olde, in which there were not just the sharing of snippets of info and a comment or two following these, but there was an actual discussion on the possible implications.  I was hoping the olde Diner still existed during this pandemic, which is why I returned here aver a long hiatus.

I want to listen in -- and participate -- in conversation about the causes and implications of all of these enormous events, how they fit together. I'm here to learn and explore, not just check the news.  Help me out here?

Well hang on and strap in. You never know what blog post or news article is going to spark that sort of discussion, and they do still happen. What you are seeing now is the Forum being peppered with what are, in effect, dispatches from the front. The "first draft of history," if you will. As I wrote elsewhere, "this is either the BIG ONE or it is NOT the BIG ONE." But it's pretty fucking big, as plagues go. Big enough to bring the world economy to its knees.

There is so much to learn and react to in the course of a day. One of the things I rely upon is that  group of people from all over with different foci and POVs post things here which in many cases I would not otherwise see. And I see a LOT in the course of the day.

We've already got plague and locusts; I'm waiting for frogs and boils as well.

I hear ya.

Dude, I'm way out ahead of most folks. Way out ahead … in the sense of trying to know how to prepare the lifeboats,  how many lifeboats to prepare, and that sort of thing.

I feel as if I'm on the Titanic and we have hit an iceberg and ripped a hole in the hull.  Now I'm a farking Casandra insisting that we all prepare for the middle term of this. The short term preparations are made well enough. We can't really fully perceive what the long term asks of us, exactly. But when it comes to middle term contingency planning and the dialogue about that I'm hearing mostly crickets.  It's lonely where I am.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

 

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