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Reddevil556
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 4:20 pm

LAXdude1023 wrote:
I found the below quite comical.

I wonder if said congresswoman realizes that oil prices crashing is bad for green energy. She should want prices to be sky high so that green energy costs similar or is more economical. This will just delay the transition further.

https://news.yahoo.com/amphtml/aoc-prai ... 22505.html


Not at all, if she had her way JFK and every other airport would be closed in the name of going green. Looney Tune characters get elected to office from time to time. She wants commercial aviation to be banned...at least planes that are equipped with fossil fuel consuming engines.
Jumped out of: C130H, C130J, C17A, C212, CH47, and UH60. Bucket list: C160, A400, C2
 
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SteveXC500
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:18 pm

Hopefully everyone has already read roughly posts three through five, logically explaining that this is for May futures contracts which expire 4/23. June is more “normal” but likely to decline should not storage or demand exist in the nearby market month.
This happens in agriculture basis at the local level all the time. It’s the current market, that’s about it.
 
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lightsaber
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:26 pm

Moved to non-aviation as discussion became majority non-aviation.

Lightsaber
Winter is coming.
 
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einsteinboricua
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:31 pm

SteveXC500 wrote:
Hopefully everyone has already read roughly posts three through five, logically explaining that this is for May futures contracts which expire 4/23. June is more “normal” but likely to decline should not storage or demand exist in the nearby market month.
This happens in agriculture basis at the local level all the time. It’s the current market, that’s about it.

Well...June contracts are already the main contracts being followed on the tickers and they're down to $10. And today is the first day that they're center stage as the benchmark, which means they have a whole month of price swings before they're replace by July contracts.
"You haven't seen a tree until you've seen its shadow from the sky."
 
bhill
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:45 pm

janders wrote:
Keep in mind this is based on specific futures contract expiring this week - the contracts are due and people don't want to take physical possessions.

The price of the oil futures contract further down the road still continues to trade above $20 per barrel.

Yes its a weird situation, but ultimately what it means is that the producers will pay traders to take the oil off their hands.


Well if those contracts are expiring and I was an airline bean counter, I would be leasing tankers up the Ying Yang to store the fuel if I had to take possession!!! Unless there is a "use by" date for JP......
Carpe Pices
 
bhill
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 6:47 pm

...and if memory serves, wasn't SWA the super smart one back in 2008 that got a REALLY sweet deal on their futures for fuel?
Carpe Pices
 
LabQuest
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 7:27 pm

bhill wrote:
...and if memory serves, wasn't SWA the super smart one back in 2008 that got a REALLY sweet deal on their futures for fuel?


They were indeed.
 
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par13del
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 9:23 pm

How do we factor the agreement they just reached with the USA getting involved to encourage Mexico?
Does it mean that there is already a mechanism in place to stabilize prices at a certain level?
 
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SteveXC500
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 9:40 pm

einsteinboricua wrote:
SteveXC500 wrote:
Hopefully everyone has already read roughly posts three through five, logically explaining that this is for May futures contracts which expire 4/23. June is more “normal” but likely to decline should not storage or demand exist in the nearby market month.
This happens in agriculture basis at the local level all the time. It’s the current market, that’s about it.

Well...June contracts are already the main contracts being followed on the tickers and they're down to $10. And today is the first day that they're center stage as the benchmark, which means they have a whole month of price swings before they're replace by July contracts.


I am not an expert on the oil market, by trade, but I would guess June will go to zero or negative if the same demand (lack of) continues through May.
 
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Aesma
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Re: WTI Oil price goes negative

Tue Apr 21, 2020 11:02 pm

Oil is proving not as fungible as it was supposed to be.

The US is a net exporter, but it still imports lots of oil, and exports lots. Oil has difficulty going from one end of the country to the other. Saudi Arabia owns US refineries, so of course these refineries prefer Saudi oil. 50 millions barrels are on boats that will arrive at US ports in the next few weeks...

Insiders are predicting Trump will slap tariffs on oil...
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
LJ
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 5:20 am

bhill wrote:
Well if those contracts are expiring and I was an airline bean counter, I would be leasing tankers up the Ying Yang to store the fuel if I had to take possession!!! Unless there is a "use by" date for JP......


Good luck finding an available oil tanker which isn't used as storage at present. Apart from the fact that you've to transport the oil to the sea (where your oil tanker probably is, oil tankers are already in use as storage facility or on long term leases by shipping companies and aren't cheap either (I hear around USD 125,000 a day).
 
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Pellegrine
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 7:06 am

Another thing to remember re. the price of finished petroleum products is that refineries source crude from all around the world. The only negative prices were/are for some US and Mexican blends. Prices from the Middle East, Russia, and Canada are still from $10 to around (or over) Brent price.
We fly JETS, we don't fly donkeys.
 
Waterbomber2
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Re: Oil price crash

Wed Apr 22, 2020 8:42 am

With storage running out, I guess that we could soon see jet fuel suppliers offering airlines to fill the tanks of their stored aircraft and allowing them to pay the fuel once they need it, at a discount.
It's good for aircraft too, it prevents corrosion in the wing by leaving moisture out.
Jet fuel stays good for a good while unlike unleaded car fuels.
 
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einsteinboricua
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 12:49 pm

SteveXC500 wrote:
I am not an expert on the oil market, by trade, but I would guess June will go to zero or negative if the same demand (lack of) continues through May.

I'm no expert either, but it's too early to make that call right now. Demand may be lagging in May; the question is whether there's a noticeable change in that it's no longer slumping. Optimism that June may be the month when demand starts picking up is not farfetched and can actually make oil contracts jump back over $20. There's an entire month ahead of trading before the last call.
"You haven't seen a tree until you've seen its shadow from the sky."
 
tommy1808
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 1:15 pm

par13del wrote:
How do we factor the agreement they just reached with the USA getting involved to encourage Mexico?
Does it mean that there is already a mechanism in place to stabilize prices at a certain level?


The fun bit is that the US just tried to make such deals effectively illegal.. https://en.m.wikipedia.org/wiki/No_Oil_ ... artels_Act

Reddevil556 wrote:
LAXdude1023 wrote:
I found the below quite comical.

I wonder if said congresswoman realizes that oil prices crashing is bad for green energy. She should want prices to be sky high so that green energy costs similar or is more economical. This will just delay the transition further.

https://news.yahoo.com/amphtml/aoc-prai ... 22505.html


Not at all, if she had her way JFK and every other airport would be closed in the name of going green.


You know that is made up hogwash, right?
https://www.google.com/search?q=does+green+deal+eliminate+air+travel&oq=does+green+deal


Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Reddevil556
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 1:47 pm

You know that is made up hogwash, right?
https://www.google.com/search?q=does+green+deal+eliminate+air+travel&oq=does+green+deal


Best regards
Thomas[/quote]

Is it though? I read the NPR article and it laid out the plan to make commercial air travel irrelevant. Sorry I did not use the exact quote and paraphrased. So no it’s not hogwash and to take matters further I now work in the field environmental protection. People like AOC are radicals and a danger to real conservation work. My colleagues and I work everyday to make improvements, we don’t pound our fists and launch outrageous ideas around to the media. But heck what do I know.

https://www.npr.org/2019/02/07/69199730 ... al-outline
Jumped out of: C130H, C130J, C17A, C212, CH47, and UH60. Bucket list: C160, A400, C2
 
GalaxyFlyer
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 2:08 pm

GND quote,

"Overhauling transportation systems" to reduce emissions — including expanding electric car manufacturing, building "charging stations everywhere," and expanding high-speed rail to "a scale where air travel stops becoming necessary";
 
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SteveXC500
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 2:24 pm

einsteinboricua wrote:
SteveXC500 wrote:
I am not an expert on the oil market, by trade, but I would guess June will go to zero or negative if the same demand (lack of) continues through May.

I'm no expert either, but it's too early to make that call right now. Demand may be lagging in May; the question is whether there's a noticeable change in that it's no longer slumping. Optimism that June may be the month when demand starts picking up is not farfetched and can actually make oil contracts jump back over $20. There's an entire month ahead of trading before the last call.


As of today (4/22/20), June is up but trading around $15. Current contract low is $10.26. We'll see how much it tests the bottom in the coming weeks. Word of boats of oil heading towards the U.S. doesn't help supply glut we already have.
Ethanol plants are shutting down as we speak, some until July at least. No driving demand and big reductions/shutdowns in refining means nowhere for Ethanol to go either. Interesting markets.
 
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seb146
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 3:42 pm

Something I have never had explained to me other than "that's just the way it is":

Oil is traded in terms of future delivery. The price set today is for delivery in mid-June. The price next week will be for delivery at the end of June. The price of gas here is currently $2.50 per gallon. But, let's say the price of delivery for the end of June shoots up to, say $100, the price we pay at the pump will, that day, shoot up to $3 or higher per gallon. If the price for delivery at the beginning of July goes back down to $10 a barrel, the price at the pump will still remain around $3.

One explanation is that oil refineries have to cover the cost of future delivery. Okay, fine. But, what about the future deliveries after that? Why does price gouging continue when the cost of refining has been covered? Maybe I am explaining it wrong.

Why is the price increase at the pump tied to the current day's future cost but there seems to be no price decrease at the pump tied to the current day's future loss?
You bet I'm pumped!!! I just had a green tea!!!
 
AirWorthy99
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Re: WTI Oil price goes negative

Wed Apr 22, 2020 7:58 pm

GalaxyFlyer wrote:
GND quote,

"Overhauling transportation systems" to reduce emissions — including expanding electric car manufacturing, building "charging stations everywhere," and expanding high-speed rail to "a scale where air travel stops becoming necessary";


This is one side-effect from this coronavirus shut down that many on the left never expected, despite their willingness to allow the economy to collapse as a result of the panic driven measures.

GND is now much farther from seeing the light of day. Oil prices are way too cheap and will continue to be cheap for a long time considering the world is going to enter depression territory and the amount of oil available is way too much. No point in investing in other sources of energy that are much expensive and will cost more to produce when the world will stick with fossil fuels whilst they sail through this economic storm. In other words, if you are hurting financially you won't buy the expensive electric car, or put solar panels in your roof since you can't pay for it and the other methods are going to remain cheaper.

Its very unfortunate for them, but in this crisis we all are going to lose on our agendas. GND is dead.
“It’s easy to confuse ‘what is’ with ‘what ought to be,’ especially when ‘what is’ has worked out in your favor.” Tyrion Lannister
 
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casinterest
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Re: WTI Oil price goes negative

Thu Apr 23, 2020 1:38 am

AirWorthy99 wrote:
GalaxyFlyer wrote:
GND quote,

"Overhauling transportation systems" to reduce emissions — including expanding electric car manufacturing, building "charging stations everywhere," and expanding high-speed rail to "a scale where air travel stops becoming necessary";


This is one side-effect from this coronavirus shut down that many on the left never expected, despite their willingness to allow the economy to collapse as a result of the panic driven measures.

GND is now much farther from seeing the light of day. Oil prices are way too cheap and will continue to be cheap for a long time considering the world is going to enter depression territory and the amount of oil available is way too much. No point in investing in other sources of energy that are much expensive and will cost more to produce when the world will stick with fossil fuels whilst they sail through this economic storm. In other words, if you are hurting financially you won't buy the expensive electric car, or put solar panels in your roof since you can't pay for it and the other methods are going to remain cheaper.

Its very unfortunate for them, but in this crisis we all are going to lose on our agendas. GND is dead.



GND is not dead. One thing you forget about this lack of use of oil., is that it is opening the eyes of many to a life without fossil fuels. Stars twinkle in the sky without the haze of pollution, cities like LA can actually breath again. Sure cheap oil is great now, but no one is using it. The longer the shutdown, the more companies that go bankrupt, the tighter the supply will be when the recovery occurs. Make no mistakes, oil will be king for awhile, but oil is only stored solar energy .
Where ever you go, there you are.
 
olle
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Re: Oil price crash

Thu Apr 23, 2020 6:37 pm

The depression following the covid first wave outbreak will probably last until 2022-2023. In 2023 most new cars in China and Europe + heavy trucks and transport systems will be much more electrified then today.

I have the sensation that the oil prices of well over USD 100 that we saw 10 years ago will in the future be seen as the start of decline for oilindustry. The next 20 years will be the death with a 1000 cuts like we saw the coal industry in the 60s to 80s.

My guess is that in 2035 countries like Canada,UK and Norway will not be oil producers anymore.
 
LCDFlight
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Re: Oil price crash

Thu Apr 23, 2020 6:45 pm

olle wrote:
The depression following the covid first wave outbreak will probably last until 2022-2023. In 2023 most new cars in China and Europe + heavy trucks and transport systems will be much more electrified then today.

I have the sensation that the oil prices of well over USD 100 that we saw 10 years ago will in the future be seen as the start of decline for oilindustry. The next 20 years will be the death with a 1000 cuts like we saw the coal industry in the 60s to 80s.

My guess is that in 2035 countries like Canada,UK and Norway will not be oil producers anymore.


There will still be plenty of oil around in 15 years. I guess you are saying they will just not pump it anymore?

You know that $15 oil is much worse for the oil company than $100 oil, right?
 
olle
Posts: 2359
Joined: Tue Feb 06, 2007 3:38 am

Re: Oil price crash

Thu Apr 23, 2020 7:30 pm

LCDFlight wrote:
olle wrote:
The depression following the covid first wave outbreak will probably last until 2022-2023. In 2023 most new cars in China and Europe + heavy trucks and transport systems will be much more electrified then today.

I have the sensation that the oil prices of well over USD 100 that we saw 10 years ago will in the future be seen as the start of decline for oilindustry. The next 20 years will be the death with a 1000 cuts like we saw the coal industry in the 60s to 80s.

My guess is that in 2035 countries like Canada,UK and Norway will not be oil producers anymore.


There will still be plenty of oil around in 15 years. I guess you are saying they will just not pump it anymore?

You know that $15 oil is much worse for the oil company than $100 oil, right?


I am saying that will Norway be able to produce without loss under 25 USD?

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