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PepeTheFrog
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:14 pm

Who needs a fuel efficient aircraft with these fuel prices?

NEO business case was wrapped around $120 per barrel.

Unbelievable.
Good moaning!
 
CriticalPoint
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:17 pm

ITSTours wrote:
https://oilprice.com/oil-price-charts/45

Well what a crazy time to live.

WTI is -37 USD per barrel. What is the impact on the air transportation?
There's a big spread between jet kerosene and crude oil now. Can airlines stock up the crude and ask for processing later?


For the May contract that expires tomorrow.....Oil is still $20/barrel

Basically the speculators and hedge funds just took it in the shorts.
 
Exeiowa
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:19 pm

You probably need your own barrel. There are technical reasons for this mostly due to people who normally trade paper being unable to trade the paper and getting stuck with the actual oil. But it is an indication of the strange times we are living through
 
Okie
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Re: Oil price crash

Mon Apr 20, 2020 8:20 pm

Waterbomber2 wrote:
Here are a few idea's: -why don't they use aircraft as tanks to store oil?Perhaps start with aircraft in scrapyards?There must be thousands of stored aircraft across the deserts, including military aircraft.It's free oil.-Why not pump the oil into oil wells? Ok, it will mix the oil varieties, but oil is oil.


I am not picking on you but you have to remember there is a specific difference between "paper oil" as in futures and "crude oil" as in a liquid commodity.

Tugger wrote:
And with so much now in storage and storage nearing capacity,

While there is a shortage of available storage capacity sort of like paper oil, some of that storage is on contract but not being used so there will be deals made.

Okie
 
Someone83
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:29 pm

Unless that the airline plans to take delivery of this oil in Cushing, Oklahoma. And then make their aircraft able to run on crude oil, this price is rather theoretical
 
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einsteinboricua
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Re: Oil price crash

Mon Apr 20, 2020 8:30 pm

Waterbomber2 wrote:
-Why not pump the oil into oil wells? Ok, it will mix the oil varieties, but oil is oil.

Would you drink salt water mixed with fresh water? Water is water.

Would you make a drink using ethyl alcohol and rubbing alcohol? Alcohol is alcohol.

Would you make a cheesecake out of cheddar and gouda cheese? Cheese is cheese.

Would you drink a latte made with cow milk, goat milk, and buttermilk? Milk is milk.

Need I go on?
"You haven't seen a tree until you've seen its shadow from the sky."
 
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Tugger
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Re: Oil price crash

Mon Apr 20, 2020 8:31 pm

Okie wrote:
Tugger wrote:
And with so much now in storage and storage nearing capacity,

While there is a shortage of available storage capacity sort of like paper oil, some of that storage is on contract but not being used so there will be deals made.

Okie

Hmmm, OK I kind of understand. Of course with prices so low right now, I can only imagine that every ounce of oil that can be put into storage is. Cushing OK (which based on your name I am betting you know far more about than ever will) has got to be filling up at an unheard of pace (last I heard it was nearing 70% capacity).

Tugg
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There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
lhrnue
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:49 pm

I just filled up my car and was paid $40
 
tphuang
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:49 pm

I believe this is due to contango. oil prices are down, but today is more technical situation rather than market fundamentals.
 
himarhernandez
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 8:52 pm

:lol:
lhrnue wrote:
I just filled up my car and was paid $40
 
LCDFlight
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 9:13 pm

All this “expires tomorrow” stuff blah blah. How exactly can today’s stockpiled oil be consumed, In order to take future delivery Of more oil In May or June?

Hmm? It Still comes in faster than it can be consumed. Until that changes- genuine crude oil price is, or must soon be, indeed negative. It’s a come to Jesus / Muhammad moment for all concerned.
 
GalaxyFlyer
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Re: Oil price crash

Mon Apr 20, 2020 9:18 pm

Cushing oil holdings are up 50% since early March.

https://www.reuters.com/article/us-oil- ... SKBN21Z28G
Last edited by GalaxyFlyer on Mon Apr 20, 2020 9:24 pm, edited 1 time in total.
 
WaywardMemphian
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 9:19 pm

lhrnue wrote:
I just filled up my car and was paid $40

There arw places in Arkansas that regular unleaded is below $1 and premium is $1.39(usually ethanol free). In normal markets between $1.19 and $1.29 regular can be had with ease. I completely filled up my F140 with under a quarter tank for under 25 bucks last night.

As soon as the majority of states reopen we are going on one hell of a 3 week Narional Park adventure.
 
Okie
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Re: Oil price crash

Mon Apr 20, 2020 9:22 pm

einsteinboricua wrote:
Waterbomber2 wrote:
-Why not pump the oil into oil wells? Ok, it will mix the oil varieties, but oil is oil.

Would you drink salt water mixed with fresh water? Water is water.

Would you make a drink using ethyl alcohol and rubbing alcohol? Alcohol is alcohol.

Would you make a cheesecake out of cheddar and gouda cheese? Cheese is cheese.

Would you drink a latte made with cow milk, goat milk, and buttermilk? Milk is milk.

Need I go on?


Well yes you actually can. We store natural gas in old depleted fields as well as the giant caverns that hold out national strategic reserves.
Trump proposed that we should start refilling the strategic reserves a couple weeks back while prices are low but the idea was shot down by "Let them eat Ice Cream'
Part of the Balkan Crude is mixed with the Canadian Tar Sands to dilute it enough so it can be pumped through a pipeline without heating it.

Okie
 
MIflyer12
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 9:27 pm

Insertnamehere wrote:
Well I am sure Delta is rubbing their hands with their refinery being able to buy up the cheap oil and stockpile it while the fleet is barely flying.


Whalejet wrote:
There's no place on earth to store the oil.


Well, there may be some place, but no place near where the oil is being produced and readily transported. Reports of the Cushing, Oklahoma (contract delivery location for many U.S.-traded oil futures) filling up are legion.

Unless DL has storage for 140K barrels a day x 90 days at its refinery (and I'm sure it doesn't) it really isn't in a position to stockpile for big profit. That, and it doesn't need much of the refined product, either - has anybody looked at the DL schedules out of PHL and NYC lately? :o
 
ltbewr
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Re: Oil price crash

Mon Apr 20, 2020 9:30 pm

I wouldn't be surprised if the US Federal government buys oil as such a cheap price for the emergency reserves to stabilize the price. The last time barrel oil was that cheap, pump prices were 29.9 US cents a gallon in the early 1970's. Still this not good as means we have financial gridlock, a full on Depression, could trigger a lot of instability in major oil countries and regional states of countries that rely on oil revenues to fund much of their government. This is going to get very ugly very fast.
 
smartplane
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 9:31 pm

Must be some very marginal storage facilities being pressed into service, including decommissioned tankers. Just need a significant storm in the wrong place..............
 
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einsteinboricua
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Re: Oil price crash

Mon Apr 20, 2020 9:45 pm

Okie wrote:
Well yes you actually can. We store natural gas in old depleted fields as well as the giant caverns that hold out national strategic reserves.
Trump proposed that we should start refilling the strategic reserves a couple weeks back while prices are low but the idea was shot down by "Let them eat Ice Cream'
Part of the Balkan Crude is mixed with the Canadian Tar Sands to dilute it enough so it can be pumped through a pipeline without heating it.

1. He's not talking about pumping oil back into empty wells. He alludes to mixing varieties by dismissing the properties of each one (oil is oil), meaning that it'll be contaminated. That's why I brought up the analogies: it's not that it can't be done; it's that it's not practical. If you were to pump back into a well, your best bet is to ensure the oil is of similar density and sulfur content.

2. Diluting part of the mix for other purposes (transportation, refining, other) is different from just storing different varieties mixed together. You can't just store liquids of similar densities unless you plan to use it like that. The Balkan Crude mixed with Tar Sands has a purpose and odds are that refineries that purchase the crude are equipped to process it and remove the impurities. I don't think anyone stores both crudes together to then extract pure Balkan, pure Tar Sands, and the mix of both from the same well.
"You haven't seen a tree until you've seen its shadow from the sky."
 
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Dutchy
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Re: Oil price crash

Mon Apr 20, 2020 9:47 pm

ltbewr wrote:
I wouldn't be surprised if the US Federal government buys oil as such a cheap price for the emergency reserves to stabilize the price. The last time barrel oil was that cheap, pump prices were 29.9 US cents a gallon in the early 1970's. Still this not good as means we have financial gridlock, a full on Depression, could trigger a lot of instability in major oil countries and regional states of countries that rely on oil revenues to fund much of their government. This is going to get very ugly very fast.


were are they going to store it? That is the current problem.
Many happy landings, greetings from The Netherlands!
 
airways1
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 9:55 pm

With negative oil prices, could we dream of a return of the IL-62, IL-86, Tu-154, Tu-134, B-707, DC-8, Concorde...?
 
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Tugger
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Re: Oil price crash

Mon Apr 20, 2020 10:00 pm

Dutchy wrote:
ltbewr wrote:
I wouldn't be surprised if the US Federal government buys oil as such a cheap price for the emergency reserves to stabilize the price. The last time barrel oil was that cheap, pump prices were 29.9 US cents a gallon in the early 1970's. Still this not good as means we have financial gridlock, a full on Depression, could trigger a lot of instability in major oil countries and regional states of countries that rely on oil revenues to fund much of their government. This is going to get very ugly very fast.


were are they going to store it? That is the current problem.

The US Strategic Petroleum Reserve is currently at 635M barrels, max is 797M but they normally hold to 90%, so figure just under 100M barrels more can be added.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
Okie
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Re: Oil price crash

Mon Apr 20, 2020 10:04 pm

einsteinboricua wrote:
1. He's not talking about pumping oil back into empty wells. He alludes to mixing varieties by dismissing the properties of each one (oil is oil), meaning that it'll be contaminated. That's why I brought up the analogies: it's not that it can't be done; it's that it's not practical. If you were to pump back into a well, your best bet is to ensure the oil is of similar density and sulfur content.


It is done all the time our strategic reserves are filled with oil from about every field in the world but yes those that are low in sulfur.

ltbewr wrote:
Still this not good as means we have financial gridlock, a full on Depression, could trigger a lot of instability in major oil countries and regional states of countries that rely on oil revenues to fund much of their government. This is going to get very ugly very fast.


Venezuela for sure. They are sitting on one of the largest oil reserves on the planet but can not buy any crude to make gasoline. They have free medical but zero supplies. Out of food and no money to buy it.
Six cent per gallon gasoline but none to be had.

Okie
 
CriticalPoint
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 10:06 pm

airways1 wrote:
With negative oil prices, could we dream of a return of the IL-62, IL-86, Tu-154, Tu-134, B-707, DC-8, Concorde...?


It’s not negative it’s still around $20/barrel
 
Waterbomber2
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Re: Oil price crash

Mon Apr 20, 2020 10:08 pm

Okie wrote:
Waterbomber2 wrote:
Here are a few idea's: -why don't they use aircraft as tanks to store oil?Perhaps start with aircraft in scrapyards?There must be thousands of stored aircraft across the deserts, including military aircraft.It's free oil.-Why not pump the oil into oil wells? Ok, it will mix the oil varieties, but oil is oil.


I am not picking on you but you have to remember there is a specific difference between "paper oil" as in futures and "crude oil" as in a liquid commodity.

Tugger wrote:
And with so much now in storage and storage nearing capacity,

While there is a shortage of available storage capacity sort of like paper oil, some of that storage is on contract but not being used so there will be deals made.

Okie


Yes but in the end futures represent a delivery contract of 1000 barrels on a specific date at a specific location.
So behind it there is always a physical delivery.
When oil is free, it makes sense to hire a fleet of tank trucks to transport it even thousands of miles away to any type of storage medium.
 
LCDFlight
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 10:12 pm

smartplane wrote:
Must be some very marginal storage facilities being pressed into service, including decommissioned tankers. Just need a significant storm in the wrong place..............


Such a scary thought, but yes, appears that even the most marginal capabilities are totally exhausted. We would expect real global price to hit zero if/when this happens. And it may be in days.
 
shane
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 10:35 pm

So I guess it's time for airlines to top up all those idle A380s & 747s and get paid for it! Why not the old mothballed A340-500s too? Now they can forget their government bailout money and collect fat checks from the oil companies instead.

(if only it were that simple)
 
twinotter
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 10:48 pm

Insertnamehere wrote:
Well I am sure Delta is rubbing their hands with their refinery being able to buy up the cheap oil and stockpile it while the fleet is barely flying.


Delta-owned Monroe Energy is likely going to collapse. Isn't Delta lucky to be in the refining business!
 
jetwet1
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 10:54 pm

ITSTours wrote:
What is the impact on the air transportation?


BA and VS will raise their fuel surcharge citing "storage expense".
 
DfwRevolution
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Re: WTI Oil price goes negative

Mon Apr 20, 2020 11:44 pm

LCDFlight wrote:
All this “expires tomorrow” stuff blah blah. How exactly can today’s stockpiled oil be consumed, In order to take future delivery Of more oil In May or June?

Hmm? It Still comes in faster than it can be consumed. Until that changes- genuine crude oil price is, or must soon be, indeed negative. It’s a come to Jesus / Muhammad moment for all concerned.


Production isn’t staying flat. Operators are shutting down production as prices go lower and lower. Every operator has a different break-even point where the cost of marginal production exceeds their revenue. There is no need for dramatization: supply and demand will come back into equilibrium far before entering real negative prices.

Remember: it wasn’t the producers paying for someone to take the oil, it was a futures contract holder (e.g. a speculator).
I have a three post per topic limit. You're welcome to have the last word.
 
LightningZ71
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 12:17 am

They may have a marginal cost of production that makes it currently unprofitable to pump and ship their product, but it also costs real, current money to fully stop production and even more money to cap a well if shutter a site for the long term. It makes sense to pump and ship oil at a near term loss if it means avoiding shutdown and restart costs.

This is what the market is currently contending with. A significant percentage of high cost production has been shit down due to long term per barrel prices that are below $60/bbl. At $20, even traditional lower cost sites are loosing money hand over fist. I suspect that a lot of production will stay on at present. It will run at absolute minimum volumes for a bit, but, some demand will be back soon.
 
MIflyer12
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 12:26 am

The U.S. Energy Information Administration has great data sets, some of which show weekly nationwide consumption by type. Between the weeks of 3/6/20 and 4/10/20, gasoline consumption dropped by 1/3, and jet fuel consumption by more than 2/3. Total products consumed dropped by more than 8 million barrels a day. Losing some marginal fracking wells in Texas and New Mexico isn't going to bring the market into balance. Excess natural gas production can just be flared - there have been times recently where gas, too, had a negative price. There's no such easy (but environmentally irresponsible) solution with oil.
 
LAXdude1023
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 12:29 am

LightningZ71 wrote:
They may have a marginal cost of production that makes it currently unprofitable to pump and ship their product, but it also costs real, current money to fully stop production and even more money to cap a well if shutter a site for the long term. It makes sense to pump and ship oil at a near term loss if it means avoiding shutdown and restart costs.

This is what the market is currently contending with. A significant percentage of high cost production has been shit down due to long term per barrel prices that are below $60/bbl. At $20, even traditional lower cost sites are loosing money hand over fist. I suspect that a lot of production will stay on at present. It will run at absolute minimum volumes for a bit, but, some demand will be back soon.


Depends on the site. If you’re talking North Dakota and south Texas yes. Their break even cost is $53. But the Permian break even cost is $24.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
Okie
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Re: Oil price crash

Tue Apr 21, 2020 12:44 am

Waterbomber2 wrote:
Yes but in the end futures represent a delivery contract of 1000 barrels on a specific date at a specific location.So behind it there is always a physical delivery.

There is always a settlement by the last day of the contract it is not always physical delivery.

By the same token as I indicated up thread. There are storage contracts that are not being used. We are what Feb, March and now April contracts someone with foresight knew that there were more contracts outstanding than use.
Speculation is that some one/group/fund/company with unused contracted storage will be taking delivery and others will take the cash difference.

Okie
 
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Aaron747
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Re: Oil price crash

Tue Apr 21, 2020 12:44 am

Hopefully this will result in a drop in GA fuel prices in a couple months.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
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einsteinboricua
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Re: Oil price crash

Tue Apr 21, 2020 1:13 am

Aaron747 wrote:
Hopefully this will result in a drop in GA fuel prices in a couple months.

Doubtful. If the contract still had a few more days of trading, MAYBE (though knowing gas companies, they would reach a floor because processing crude into petrol still costs money, and they'd likely want to hedge the price of next month's contract). This negative value delivery will not even be visible in gas prices, likely because there's nowhere to store it.
"You haven't seen a tree until you've seen its shadow from the sky."
 
WaywardMemphian
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 2:40 am

With demand so low and US output capability, You'll start to hear talk of banning imported oil to the US if prices don't stabilize muy pronto. The end of the line Unleaded pipeline terminals are selling unleaded for as low as 12 cents a gal as it has no where else to go.
 
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trpmb6
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Re: Oil price crash

Tue Apr 21, 2020 2:44 am

Trumps plan was to buy oil futures, rather than actual oil.. with an unlimited call date. Its probably not legal. But you would buy oil without having it pumped with a delivery date at the time of the US governments choice.
 
GalaxyFlyer
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Re: Oil price crash

Tue Apr 21, 2020 3:12 am

Jet A, yes, but 100LL not much of chance. It’s too much of a specialty product.
 
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Aaron747
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Re: Oil price crash

Tue Apr 21, 2020 3:15 am

GalaxyFlyer wrote:
Jet A, yes, but 100LL not much of chance. It’s too much of a specialty product.


Damn. Can’t say I have ever looked into what goes into its production...until today. Not that it matters...my pal is selling his C-206 so I won’t be at the helm for a long while.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
speedbird52
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 3:33 am

shane wrote:
So I guess it's time for airlines to top up all those idle A380s & 747s and get paid for it! Why not the old mothballed A340-500s too? Now they can forget their government bailout money and collect fat checks from the oil companies instead.

(if only it were that simple)

I can genuinely see some older aircraft lasting longer depending on the speed of the recovery. Why spend money taking news planes when it is cheaper to fly older planes? Then again, most airlines will likely be shrinking fleet sizes dramatically, and older planes get the chopping block first.
 
A330Inter
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:27 am

Isn't it the best time to hedge though now? $20 might fluctuate in the next couple of months but we could expect it to rise again in the coming decade, can contracts be secured for such a long time ahead in order for the airline to secure stability of its fuel price for say the next 10 years?
 
LJ
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:42 am

A330Inter wrote:
Isn't it the best time to hedge though now? $20 might fluctuate in the next couple of months but we could expect it to rise again in the coming decade, can contracts be secured for such a long time ahead in order for the airline to secure stability of its fuel price for say the next 10 years?


No, because hedging costs a lot of money if you want to hedge for such a long period (if you can find someone who actually going to do the trade with you). The risk premium must be enourmous, if traders are even allowed to consider such contracts. Moreover, why would you want to have a 10-year contract? How do you know how much you need in 10 years time? Moreover, airlines cannot predict the oil price in a 1 year period, thus 10-years is undoable.
 
Flyingsottsman
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 12:01 pm

Bring back the 747s DC10/MD-11s :lol: Once this is over and people start traveling again, the oil will go back up to where the price was before COVID 19.
 
Flyingsottsman
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 12:02 pm

Oh and I forgot the A340's to.
 
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par13del
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 1:24 pm

I suspect that by the time the refineries consume the stock that is presently setting the price at the pump, the value of a barrel will stabilize, so these low crude prices will never be reflected at the pump for the motorist, at least not the huge drops in price.
If power companies for example lock in prices now, it simply means higher revenues as lowering prices to consumers is something that is frowned upon.
 
MIflyer12
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 1:41 pm

par13del wrote:
If power companies for example lock in prices now, it simply means higher revenues as lowering prices to consumers is something that is frowned upon.


Since the thread references WTI explicitly, it's fair to limit this to U.S. prices.

I don't think you're familiar with U.S. electric utility rate setting, nor how electric power is predominantly generated in the U.S. Very little is generated from fuel oil. Think of isolated places not connected to a broader grid: Alaska, Hawaii, far northern coastal California. It's about 1% of total for oil-fired generation. No, I did not drop a digit.

https://www.eia.gov/tools/faqs/faq.php?id=427&t=3

As for rates, there are commonly explicit fuel-cost factors in commercial and residential rates. The price of natural gas goes down - your price per kWh goes down.
 
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par13del
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 2:30 pm

MIflyer12 wrote:
par13del wrote:
If power companies for example lock in prices now, it simply means higher revenues as lowering prices to consumers is something that is frowned upon.


Since the thread references WTI explicitly, it's fair to limit this to U.S. prices.

The oil that USA companies purchase that is not used domestically are sold to third countries with the USA prices forming the basis of the selling price.
Once done, the chain of events down the line are virtually similar.
 
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Antaras
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 3:11 pm

Reddevil556 wrote:
Flyingsottsman wrote:
Bring back the 747s DC10/MD-11s :lol: Once this is over and people start traveling again, the oil will go back up to where the price was before COVID 19.


And restart production of the 757 :rotfl:

You guys have forgotten a bunch of Soviet-made airframes.
At least they have higher safety rate than the Max :duck:
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Lrockeagle
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 3:30 pm

LJ wrote:
A330Inter wrote:
Isn't it the best time to hedge though now? $20 might fluctuate in the next couple of months but we could expect it to rise again in the coming decade, can contracts be secured for such a long time ahead in order for the airline to secure stability of its fuel price for say the next 10 years?


No, because hedging costs a lot of money if you want to hedge for such a long period (if you can find someone who actually going to do the trade with you). The risk premium must be enourmous, if traders are even allowed to consider such contracts. Moreover, why would you want to have a 10-year contract? How do you know how much you need in 10 years time? Moreover, airlines cannot predict the oil price in a 1 year period, thus 10-years is undoable.

WN had a hedge a number of years ago that saved them millions and millions. They were paying way less than the other airlines during the last big price spike. Though they’re most likely taking it on the chin right now. https://www.google.com/amp/s/www.fool.c ... spike.aspx
Lrockeagle
15 years ago

I got $20 says AA takes their 787's with GE powerplants. Just a hunch. Any takers?
 
tphuang
Posts: 5232
Joined: Tue Mar 14, 2017 2:04 pm

Re: WTI Oil price goes negative

Tue Apr 21, 2020 4:01 pm

Took a bigger look at this last night. The entire situation got a little overblown. This was a very technical event where some market makers were stock holding a bunch of long positions on the May contract and had to get out since they don't have the facilities to store this. And they definitely didn't want to take delivery.

And right now, there is a glut in the market for near months. That's why even June contract is priced way lower than end of year futures. Keep in mind, the people who actually need oil immediately were not able to buy it at such low prices. The people buying it are most likely the few guys in the market who happened to have facilities to store the contract at the moment. We are going to see this again in May when USO rolls their June contracts and later on (around May 19th) when June contracts stop trading.

Unless the airlines start having places to store mass amount of oil, this really won't benefit them that much.

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