Posted on 03/18/2020 12:12:24 PM PDT by 11th_VA
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.
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 its 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...
(Excerpt) Read more at google.com ...
$2.09 in New Milford, CT yesterday
If true, then the entire financial system is going down.
That is when we will be taken to war.
This is because when everything fails, people lose everything and that is when people lose it.
Quite possibly the dumbest thing I have ever heard. The operators would just shut the wells in and wait for better days. Now, gas production through the Waha Hub occasionally drops below zero but they are just giving the natural gas away to make the oil as they can’t just vent it. They are building more take-away capacity to remedy this but it is a few years away.
Don't strike a match around Alvin(TX) for a while.
Join us as we return to the days when gas was .32 cents a gallon and you could fill up your 57 Chevy Impala for under $5.00. Yes, we will go back to yesteryear.
How can someone write this drivel and not be fired!
$1.99 in Minot ND
I guess I need to get a few of those giant storage tanks. Not only will I get the oil for free, but the producers of said oil will apparently PAY ME to take it off their hands! It makes perfect sense! I’m glad I had this “analyst” to explain it to me.
Good. You have to take advantage of any opportunity this may bring.
If gasoline cost 0.00 per gallon the Taxes would require you pay a dollar to 5 or 6 dollars a gallon depending where you are in the world. -Tom
Actually, gas could be free. But I think tax on a gallon is still something like $2.50 if not more.
I read awhile back that Trump intends to have the govt buy as much of our oil production as he can at these low prices—to keep our oil industry from collapsing—and to replenish our federal reserves. I assume this means storing it underground.
Yes, they will pay me to take gas?
It's a lot of "maybe ifs", but the explanation is plausible.
I doubt that the situation would last for long though.
Yeah that might happen right before it shoots up to $500 because it is almost impossible to find.
Come on people- Use your heads. No company is going to produce oil at a loss. If they start losing money then they will just shut down operations even if they don’t go bankrupt.
Cash is always a good thing.
In a few weeks people are going to realize that the corona virus, while serious, is not the monster its being made out to be and its not going to be the new Black Death.
Reasonably confident it is not going to hit the US nearly as hard as the alarmists are trying to make out
I wonder if my city will allow me to put in an underground storage tank? Hmmmmmmmmmmm...
Only if it’s a Diamond Plated one................
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