Posted on 04/01/2020 3:41:07 PM PDT by nickcarraway
After having crashed nearly 70 percent in the first three months of 2020, benchmark WTI prices are trying to form a bottom around $20 per barrel.
But this psychological threshold is looking increasingly shaky as global crude storage facilities are filling up at an unprecedented pace. OPEC and its partners officially ended their output cut deal today, following the words of Russian Energy Minister Novak that every producer is ‘’free to pump at will’’.
With a flood of physical crude set to hit the market, it will take weeks, not months, for global oil storage space to run out. The storage problem could grow even worse as refining capacity is coming offline due to coronavirus health risks and in some cases a (very) negative crack spread caused by a double whammy of low fuel demand and crude oversupply.
Oilprice.com’s Alex Kimani wrote on Saturday that refining crack spreads are now negative in both US and Asian markets. This means that refiners must pay for every barrel they refine into fuel, which will inevitably lead to even lower demand for crude feedstock.
The gap between supply and demand in oil markets is expected to grow increasingly pronounced this month. Trading giant Trafigura’s chief economist now expects demand for crude to fall by 30 million bpd in April as around 3 billion people remain under lockdown worldwide.
In the meantime, OPEC producers Saudi Arabia and the UAE are preparing to flood European and Asian markets with crude. Bloomberg reported that the Kingdom’s supply has now officially surpassed the 12 million bpd mark,
(Excerpt) Read more at oilprice.com ...
I paid $1.79 yesterday, lowest since I don't know when. Then I realized that the only distance driving I do is about 13 miles to play softball with fellow retires until yesterday when we were kicked out of the park indefinitely......
So, that full tank is going to last for quite a while.....LOL!
I just texted a friend the information and he responded that his daughter paid $.829 per gallon at a Kroger store........What the heck!
I was very involved in the Bakken years ago during the Obama years.
I can tell you firsthand that most pumpers are farmers and ranchers and nearly all of them DO NOT TRUST THE OIL COMPANIES.
They are very protective of their land and so are the Native American tribes which hold millions and millions of acres of shale oil rich land.
The driving force behind the miracle of the Bakken which has allowed the US to become oil independent because it has proven reserves more than 10 X Saudi Arabia are the rancher families and their coops, NOT the corporate oil companies.
The only reason I and my small startup were successful is because I had with me some folks that were down to earth, Christian, having high integrity and it took awhile.
The actual decision makers in those rancher and farming families is most often the mother of the family, the matriarch and she will look you over and study you up one side and down the other. And it could take weeks to get her approval if you get it at all.
One of my team had a very humble way about him and knew about ranching in Eastern Washington, he went out to do some volunteer work on ranches and develop friendships, He attended Church, prayed with the families and some finally gave him a chance to bring oil and gas trucks to their pumps and fill up, signing a contract to act as a sales representative but not exclusive, not even near that.
There are thousands of such families and they dominate the landscape. These are real Americans and they don’t trust Wall St. at all, not even a little. God bless them.
That’s partially true but they have always had that before them.
What’s really going on is a realignment of Trump with Boris Johnson’s UK.
It doesn’t seem to be related but it is.
Saudis, Russia and not so much Iran these days because of the embargo, have had the Euro zone as their market for as long as most can remember.
All their market is about to change because of the emerging US oil superiority with the UK slotted as the primary broker and distributor into Europe.
Now Saudis have an economic advantage as it costs $6-$8 per barrel to extract from their ground.
In the Bakken it costs $28-$35 per barrel but that cost is going down with technology and infrastructure buildout.
What President Trump can do when he’s ready, he can slap a tariff on Saudi oil sales into the US that protects the American oil industry.
But for the moment and probably most of this year he is going to buy up as much cheap Saudi oil as he can get his hands on while supporting oil patch workers with the rescue bill. I hope the rescue bill reaches and keeps oil patch workers whole until this pandemic is resolved.
From Jul 29, 2013:
PRINCE ALWALEED: Fracking Is Going To Crush The Saudi Economy If Nothing Is Done
https://www.businessinsider.com/saudi-prince-alwaleed-warns-on-fracking-2013-7
You're welcome.
Now go out and use NYC's favorite word, you know the 'eff' variety, on someone unsuspecting. Just be careful in case they're in a mood to show their street side back at ya.
That’s SE King County. As I recall Everett/Arlington are always very competitive.
Over here on the Olympic Pen. it’s still over $3/gal.
What?
Well...you aren’t supposed to be driving anyway!
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