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DolanReloadedOne of my friends is making big bets on tanker storage
I think it’s a good bet, especially because the us is gonna need oil for manufacturing etc once the countries up and running. There’s a few oil companies with solid financials that can easily see this through.
>ring ring
>hello sir this is the oil department how can I help you sir?
>yes I'd like to buy some oil
>certainly sir how much sir?
>all of it
>okay sir that will be negative $100 billion sir just provide your routing number so we can transfer the funds sir
this is fucking monumental. The us is getting strangled by the saudis and Russia. Economy on the verge of collapse. China is posing to take Taiwan. Is this how the west collapses?
NU3R0_PHYS1C1ST>ring ring
>hello sir this is the oil department how can I help you sir?
>yes I'd like to buy some oil
>certainly sir how much sir?
>all of it
>okay sir that will be negative $100 billion sir just provide your routing number so we can transfer the funds sir
this is fucking monumental. The us is getting strangled by the saudis and Russia. Economy on the verge of collapse. China is posing to take Taiwan. Is this how the west collapses?
We had a good run. Let China run the world for awhile cause I’m tired of paying for a over budgeted military and subsidized oil companies.
Good little article if you guys want to read it. Basically "investors" who never had any intention of buying oil, got fucked over. Sorta like scalpers for a concert couldn't sell any of there tickets and the concert starts in an hour.
Good little article if you guys want to read it. Basically "investors" who never had any intention of buying oil, got fucked over. Sorta like scalpers for a concert couldn't sell any of there tickets and the concert starts in an hour.
Wow what a surprise! I bet you're going to tell us that almost all futures settlements are in cash and not in physical products! Eureka!
Part of the problem is also the way the USO ETF (which owns something like 25% of the oil contracts) is made. Here's how I understand it.
People don't want to trade actual contracts, instead, they just want to trade the price of oil. SO a bank came up with an idea called a ETF. It's an intermediary where you buy ETF "stock" like any other stock in a trading platform (Ameritrade, robinhood, etc) and the bank then uses that money to buy the underlying asset. In this case, that underlying asset is the crude oil. The value of the USO ETF should track that underlying oil assets. But here is the problem.
The USO ETF doesn't run a basic underlying asset (like stock). Oil is a rolling asset. In other words, the bank running the USO bank buys May contracts (that expire April 21st) in March-April (or something) and then sells them in May before they expire. When it sells the May contracts, it uses that money to buy up June assets and continues on and on.
Well, the USO ETF was overbought, and now the bank is trying to unload all of the shitty ETFs at the end of the month (Contracts expire April 21st) and nobody who actually uses barrels wants to buy them because storage is likely to be full next month. So they are pushing the price down. A desperate seller and no buyers: that's a recipe for negative prices.
So yeah, it's a market fuck up. It doesn't actually reflect the real price of oil barrels being sold. To see that, you have to look at the EIA data for the actual price that refineries paid to buy oil. It also lags months behind.
EDIT: With crazy oil contango like this, it's an indication that too many people are over buying paper barrels. Apparently, a little contango (and a little backwardation) is normal, people are expecting the price to rise, but it hasn't, so the price continues to fall as the date gets closer because people who aren't using the barrels are buying them at a faster rate than refineries.
EDIT2: I wonder if people speculating on USO is an indication that people have overbought stocks. Since stocks aren't really based on anything real (just what someone is willing to pay for an imaginary piece of paper) and is based on expectation, I wonder if people drove up demand for stocks with an expectation that the recovery will come faster. But it won't, so there won't be the expected buyers for the stocks. IDK... just wondering out loud on this one. Wondering if oil is a canary in the coal mine for the future of the SP500.
Good little article if you guys want to read it. Basically "investors" who never had any intention of buying oil, got fucked over. Sorta like scalpers for a concert couldn't sell any of there tickets and the concert starts in an hour.
I just took all the oil out my car so it doesn’t depreciate
NU3R0_PHYS1C1STWhat do you think will happen over the next few months
Personally I hope to make some good money over the summer, buy a nice new rifle, chainsaw, and in the fall maybe make a cabin. Then ride out the depression.
I'm gonna be in Montana this summer so maybe that's where I'll stay but Alaska is dope and the state will never run out of moose to eat.
I also have in my back pocket Minnesota so there's that but I feel like Northern MN will get over run when depression migration hits.
can someone whose smarter explain the longterm implications of this?
It probably means Saudi Arabia will have us even more by the balls than they already do. Shale oil is only economical if the price of oil is high as it takes about $30 a barrel to manufacture. What is also scary is our Dollar is oil based due to the Petro Dollar agreement which means all oil must be sold in US dollars. A constant demand for oil in a growing world economy is what keeps our currency afloat despite our insane national debt. But now with the price tanked below zero, China or others could ditch the system and start buying oil in their own currency. This could theoretically cause countries to dump their dollar reserves and create a pretty serious inflationary scenario. Its is what happens when you ditch the gold standard and build a magical house of cards since the 1970s.
can someone whose smarter explain the longterm implications of this?
one of a few options, first if this is a long term issue, we will see great strides in cleaner energy research, as well as a fast overhaul in our transportation infrastructure, which could be a good thing. The nice thing about this period of history is that its a good catalyst for moving a lot of the western world into thinking about moving into the deindustrilization phase.
But economically, could be big bad, like when the coal mines all started shutting down, maybe not though, the oil market is so globalized that it cant completely fail, just certain companies might go down in a dumpster fire, but for the consumers, the oil market will adjust until its just phased out naturally due to alternative energies being more desirable.
50KalPersonally I hope to make some good money over the summer, buy a nice new rifle, chainsaw, and in the fall maybe make a cabin. Then ride out the depression.
I'm gonna be in Montana this summer so maybe that's where I'll stay but Alaska is dope and the state will never run out of moose to eat.
I also have in my back pocket Minnesota so there's that but I feel like Northern MN will get over run when depression migration hits.
Bump I downloaded Robinhood and I’m like kind of an investor now. Just bought 15$ worth of Bitcoin. Might fuck around and buy some pot stocks when the market opens tomorrow
DIRTYBUBBLEBump I downloaded Robinhood and I’m like kind of an investor now. Just bought 15$ worth of Bitcoin. Might fuck around and buy some pot stocks when the market opens tomorrow
DIRTYBUBBLEBump I downloaded Robinhood and I’m like kind of an investor now. Just bought 15$ worth of Bitcoin. Might fuck around and buy some pot stocks when the market opens tomorrow
hello, yes hi michelle from robinhood. today i tried to buy some pot stocks but i accidently got PET stocks. Yes miss 20$ in PetSmart. Can you go ahead and reverse that for me? thanks
