Oil Hits $20 For The First Time In 18 Years

Oilprice.com ^ | 03-30-2020 | Para

[bananaman22]

Oil prices plunged on Monday to their lowest levels in eighteen years, below $20 per barrel, as the coronavirus pandemic continues to cripple global oil demand with no signs of Saudi Arabia backing down on its promised supply surge.

[bankwalker]

that's why futures markets exist ... so entities holding the actual product can hedge against prices moves while they're holding.

it's no coincidence that 1 futures contract for gasoline if for 44,000 gallons, the same as a tractor trailer holds.

if they hedged they could move the price at the pump immediately to match the spot price.

[mad_as_he$$]

“44,000 gallons, the same as a tractor trailer holds.”

Huh?

Gas weighs about 6 pounds a gallon. That would be a massive truck. Did you mean pounds?

[BubbaBobTX]

Just paid $1.69 per gallon here in Austin.

[RinaseaofDs]

In the People’s Soviet of Washington, with a refinery 66 miles away, the price is $2.55. You can thank one of the nation’s highest gas taxes for that.

[Data Miner]

I filled up for $1.59 not 30 minutes ago.

[okkev68]

What I don’t understand is why very little noise from Washington about this. Obviously, oil was going down with the global lock down. But what Saudi is doing threatens more than just the U.S. oil companies. Combined with the virus, this could lead to global fighting. I have to believe the Trump admin believes this is in our best interest long term, or surely he would be tweeting about it.

My employer started major layoffs and furloughs this week.

[nascarnation]

a massive truck

They do exist but quite uncommon.

[eastforker]

A tractor trailer tanker holds about 6500 gallons. Don’t know where you got that 44,000 number.

[Texas resident]

Low oil prices are great for consumers.

Low oil prices lead to layoffs in the oil business.

Seen it over and over since the mid 70’s.

[redcatcherb412]

In the oil fields of N.W. N.M., oil is down from $80 to $20 a barrel and gas prices are down .20 a gallon to $2.25.

[VRW Conspirator]

I am experiencing prices from Clinton’s second! Though I felt raped at the time...

I just got to say it. Better put some ice on that.

[Rusty0604]

And “Last one to leave Midland turn out the lights”.

[central_va]

Maybe they will start giving this stuff away again at retail gas stations.

[SunkenCiv]

some chrono-sorted topics off the top of the OPEC keyword:

• Russia calls for brand new OPEC+ deal to stop oil price rout [2020]
• The Russia-Saudi Oil Price War and U.S. National Security [2020]
• Coal miners told to keep working during the outbreak despite close quarters, damaged lungs [2020]
• Oil Climbs As U.S. Pushes For An End To The Price War [2020]
• Saudi Arabia Tanker Power Play Could Backfire as Oil Demand Shrinks [2020]
• Oil and gas industry faces huge loss [2020]
• Oil prices could fall below zero: Analyst [2020]
• Crude oil prices have plummeted. Why not prices at the pump? [2020]
• Saudi Arabia's Oil War Could Bankrupt The Kingdom [2020]
• Trump Orders Department of Energy to Replenish U.S. Strategic Petroleum Reserve..... [2020]
• Russian share prices collapse, ruble and oil tumble [2020]
• Oil price plunge wallops NM [2020]
• Saudi Arabia, Russia raise stakes in oil standoff [2020]
• Oil prices plunge, hit by erupting Saudi-Russia oil price war [2020]
• STRAP IN: IT'S GOING TO GET BUMPY [2020]
• Oil plummets 30% as OPEC deal failure sparks price war [2020]
• Why Russia Is Rooting For Bernie Sanders [2020]
• Dow Futures Tumble 900 Points As All-Out Oil Price War Adds To Coronavirus Stress [2020]
• OPEC's pact with Russia falls apart, sending oil into tailspin [2020]
• Google Ends Kite Energy Initiative. Commercializing the tech will take too long and be too risky. [2020]
• United States Led Entire World In Reducing CO2 Emissions In 2019 [2020]
• Video: Trump Retweets Hilarious Viral Video of Texas Mayor Taking a Dump on Hot Mic [2020]
• US Oil Production Undermines OPEC [semi-satire] [2020]
• Oil production on federal lands surpasses 1 billion barrels Undermines influence of OPEC on world markets [2020]
• Democrats Trot Out 'Peak Oil' Again, and Are Just as Wrong as Ever [2020]
• Democratic senators ask banks to prohibit funding Arctic drilling [2020]
• A Heated Oxford Education. Protesting students get a personal lesson about fossil fuels. [2020]
• U.S. To Become Net Oil Exporter This Year: EIA [2020]
• In Crucial Pennsylvania, Democrats Worry a Fracking Ban Could Sink Them [2020]
• Democrats' War on Fracking Will Cost Them in Battleground States. Ohio and Michigan have more than 400,000 shale workers, and Pennsylvania alone has 320,000. [2020]
• How Europe Made Itself Dependent on Nefarious Oil Powers [2020]
• U.S. oil industry warns of economic fallout from Democratic drilling ban [2020]
• Progressive Eco-Group Admits It: Renewable Energy is a Hoax that Benefits its Greenie Elmer Gantries like Al Gore [2020]

[GOPJ]

but... but... peak oil...we’re going to run out any day... we’re all dooooooomed.

The ONLY good thing about this pandemic horror is bored 'elites' have shut up about global warming for a while.

[metmom]

So when are we going to see that at the pump?

[Zhang Fei]

[What I don’t understand is why very little noise from Washington about this. Obviously, oil was going down with the global lock down. But what Saudi is doing threatens more than just the U.S. oil companies. Combined with the virus, this could lead to global fighting. I have to believe the Trump admin believes this is in our best interest long term, or surely he would be tweeting about it.

My employer started major layoffs and furloughs this week.]

---

There is no long term for $20 oil. At $20, the Saudis run a $200b annual budget deficit. Ditto for the Russians. They can keep this up for about a year or so, before crying uncle. Because long before their foreign exchange reserves are exhausted (3 years max), their borrowing costs skyrocket, their currencies take a dive and their domestic economies grind to a halt.

Ultimately, this is about the Saudis rapping the Russians on the knuckles for exceeding their production quota. Russian oil is profitable at $20. For Saudi oil, it’s $10 or less. But both countries are heavily reliant on oil revenues to fund their government spending. At $20, Putin might lose power, just like Gorbachev did. Whereas the Saudis may have a little more breathing room, thanks to recent large scale seizures of wealth from cadet branches of the Saudi royal family by MBS.

[nascarnation]

so global CO2 is plunging
now we’re gonna freeze next winter!

[gnarledmaw]

Back around election I made a wish on this board that gas would come to be back down around $1. Maybe I should have been more specific.

[gnarledmaw]

Tomorrows archaeology today: Find this post 20 years from now. Oil will have lost most of its value as it will no longer be being used as auto fuel. 1904 was a bad time to invest in a new buggy whip factory or to start worrying about the long term effect of whaling on international politics.