Incoming 50 Million Barrel ‘Saudi Oil Bomb’ Could Send Prices Even Lower

Yahoo Finance ^ | 04/24/20

[Enlightened1]

By now even the 165,727 "professional investors" who are long the USO ETF on the free, glitch-prone platform Robin Hood, are aware that the problem facing global oil production is that there is simply no storage where to put all the physical oil (as we warned in late March).

And if even the army of Robinhood-ers now know how impossible it is to find space for physical oil on the continental US, then Saudi Arabia - which sparked the current crude crisis and which will not stop until shale is completely crushed - is certainly aware.

Which is why with the US unable to store its own output, some 50 million barrels of Saudi oil are on their way to the United States and due to arrive in the coming weeks, piling even more pressure on markets already struggling to absorb a glut of stocks, Reuters and MarineTraffic reported.

Shipping data showed the more than 20 supertankers - each capable of carrying 2 million barrels of oil - were sailing to key U.S. terminals, especially in the U.S. Gulf. Three separate tankers, also chartered by Saudi Arabia, were currently anchored outside U.S. Gulf ports.

According to Reuters sources, the kingdom had tried to seek storage options for the cargoes from tanker owners when the ships were chartered last month, but many pushed back given booming rates and not wanting tied up vessels.

The result was an outpouring of anger from the increasingly political hedge fund manager, Kyle Bass, who tweeted earlier that "the Saudis and Russians have declared war against US shale energy companies. It seems they weren't happy with American energy independence.

[LouAvul]

$1.31 here in Oklahoma. Where’s that $.99 cent gas they’re talking about?

[LouAvul]

Free Traitors™ ideologues in the GOP “leadership

You mean his daughter and son-in-law?

[one guy in new jersey]

I’m already paying $2.50/Gallon here in Cali.

It’s $1.35 in Texas.

__________

A no-name station in Paterson, NJ has been selling regular unleaded for $1.75/gallon for about a week now. That state now imposes high taxes and fees on a per gallon basis

So there’s that.

[adorno]

Look, this oil independence is completely misunderstood.

So, what you're saying is that, we are not truly energy independent.

We can be, by using coal and gas and renewable sources. The oil that we do import can be replaced by using all means of energy production.

Let he Saudis and Russians fight it out, and we can be distance watchers, while those 2 swim in their oil glut.

[Dave W]

Out of what? What are you talking about. The poster mentioned that we still import oil every day to meet our needs and the poster is correct. We export finished products since we refine more than we need.

So, what are you referring to?

[Dave W]

Never mind. You are referring to ethanol. I agree with you, but Trump promised Iowa in 2016 that he favored continued use of ethanol in gasoline, so don’t expect a change.

[9YearLurker]

Agreed—I don’t expect a change. But this would be the perfect time to initiate a change by taking care of the farmers in the process.

[conservatism_IS_compassion]

Dunno about acts of war - but couldn’t we use a nuke to excavate a 50 million barrel hole in the ground?

[oldvirginian]

“During the Carter 70’s oil shortage some gas station attendants dressed in Arab garb to lighten the atmosphere a little.”

Around here that would have gotten them beaten up at best. More likely shot and hung from the station sign.

[Dave W]

I agree with you, but it appears that this has been done. I just checked the Dept of Energy website and this is how electricity was generated in the US in 2019:

Natural Gas - 38.4%
Coal - 23.5%
Petroleum - 0.5%
Other gases - 0.3%
Nuclear - 17.5%
Hydro - 6.6%
Wind - 7.3%
Bio Mass - 1.4%
Solar - 1.7%
Geothermal - 0.4%

I was surprised wind generated so much electricity. So based on the numbers above, it appears if we want to be truly oil independent, we will need to convert cars from gas to natural gas, which is a long way down the road.

[Dave W]

Agreed. Farmers are really hurting since the supply chain can’t really be changed from out of home food to the grocery store quickly...it’s a terrible shame so the hope is opening quickly not only to help the farmers, but I wonder how much food is left in these distribution centers? Where I am at, the shelves are still bare of flour, etc etc etc...eggs are scarce, but I know eggs and chickens are being destroyed because there is no way to get them to market since I assume these were destined for restaurants.

[9YearLurker]

Yep. Too bad Walmart and Amazon couldn’t have takwn the lead to get some appropriate packaging and make deliveries. I know that tje feds are buying up product and then giving it to food banks and the like. But I bet some elements of the supply chain would have been happy to get and package the free product—and then sold it for delivery to Joe and Jane Average. Could help to get the supply chain to be more flexiblw in the future.

Also, as a farmer, it is just painful to habe to dump or destroy your product.

[Dave W]

Agreed. What do you grow or raise?