American oil crashes below $0 a barrel -- a record low

[turbinetree]

Source: CNN

By Julia Horowitz, CNN Business

Updated 3:21 PM ET, Mon April 20, 2020

London (CNN Business)The spectacular collapse in oil markets is showing no signs of easing, as the coronavirus crisis saps demand and producers run out of places to store all their excess barrels of crude.

What's happening: US oil prices plunged, falling below $0 Monday to $-37.63 a barrel. That's the lowest level since NYMEX opened oil futures trading in 1983.

The selloff can be attributed in part to market mechanics. The May futures contract for West Texas Intermediate, the US benchmark, is about to expire. Most investors are already focusing on the June contract, thinning out trading volume and feeding volatility, UBS analyst Giovanni Staunovo said.

The June futures contract for WTI is trading around $22 per barrel, but that's still sharply lower on the day. Brent crude futures, the global benchmark, fell 8% Monday to $25.81 per barrel.

Read more: https://www.cnn.com/2020/04/20/investing/premarket-stocks-trading/index.html

---

[BadGimp]

1. The real price of a barrel of oil is down 66% since this Pandemic started

The price of Gas here in Portland, Oregon has dropped maybe 10%...

It is just me or are we being exploited by the oil industry?

[turbinetree]

2. Went to Costco today and the price was $1.51 for reg and $1.75 for premium..........

[SheltieLover]

4. Gas here in TN

$1.35 reg 87 octane
$2.59 prem 93 octane

🤬

[turbinetree]

7. This was in Delaware...............

[SheltieLover]

10. TY for clarifying

👍

[SheltieLover]

3. But, of course!

This is the United States of Extortion, right?

[mathematic]

9. It's just you.

The price of gasoline from refiners has dropped 70 cents (50%) from pre-pandemic. Average retail gasoline price nationwide has dropped 60 cents to $1.85. The cost of retail gas includes the cost of a bunch of things that aren't gasoline and haven't declined in price, like labor and taxes.

[bucolic_frolic]

12. yeah i paid $2.41 about 3-4 weeks ago

thought it a good deal or good enough. Now i have my own glut

[OAITW r.2.0]

15. Refiner's are next. The capacity to manage this energy segment is different

from the oil extracters. Between collapsing demand for heating oil and gas and their own worker health, I can see some serious capacity reduction in the near future. They will create the floor for the price at the pump.

[PSPS]

21. The price you pay for gasoline includes tax. Oregon 0.36 state + 0.184 fed 0.545

Plus "local option" of an additional 0.01 - 0.05

[Wolf Frankula]

5. Remember the Peak Oil Doomers who said that by 2020

if there was any oil left it would be 100, 500, 1000 dollars a barrel? They were wrong. Yes I know this is a special case.

Wolf

[oldsoftie]

29. They've been saying that since 1980

[VMA131Marine]

30. Since you haven't noticed, conventional oil extraction has peaked

If you subtract out the fracked oil, the tar sands oil and oil the other oil that uses advanced recovery methods you’ll find conventional crude peaked probably a decade ago. These new techniques are fine as far as they go, but they take a lot more energy to extract a barrel of oil than conventional oil wells like in Saudi Arabia. Even the Saudi wells are now running an EROEI (energy return on energy invested) of between 30:1 and 50:1 compared to the 100:1 that they originally had. The EROEI of US crude is now around 10:1 which means we have to put three times as much energy in to get the same energy out as the Saudis.

[BamaRefugee]

6. Soon they'll be paying me to fill the tank, PLUS give me a new set of dishes...

[klook]

13. Lots of other tchotchkes, too

Maybe they'll bring back some of these 11 Gas Station Premiums of Yesteryear.

I actually had this Hess truck when I was a kid:


The one I really wish I'd scarfed up, though, are the Marathon B.C. comic strip glasses and cereal bowls.

[BamaRefugee]

17. Putin is opening a new chain of stores in the US, TCHOTCHKES 'R US.

[trof]

20. I like your way of thinking.

[RobinA]

36. Well It's About Time

My Esso plates from the ‘60’s are getting a bit past their prime.

[Throckmorton]

38. As are my Texaco beer glasses.

My mother still has a bunch of these from the pre-embargo gas war days.

[scarletwoman]

8. I'm not sure what exactly this means on either the macro level or the micro level.

Would this, in any way, result in an eventual weakening of the fossil fuel sector - lessening their financial/political power? And possibly making way for more renewables; biofuels and such?

[jimfields33]

14. Only if they can be done cheaper. And right now that's doubtful

I’m not sure what the cross over costs are between the two are. But gas being so extraordinarily cheap couldn’t possibly be cheaper then renewables at this time. But with everything the pendulum will swing back.

[customerserviceguy]

16. High priced fossil fuel energy

makes emerging renewable technologies more economical. This C-19 recession/depression is not going to be kind to Green New Deal ideas.

[not_the_one]

25. Not if big oil has any say in it.

I think "peak oil" was a creation for the purpose of attaining higher prices.

Yes, at some point we will/would run out of oil. But apparently that is a lot further in the future than previously thought. This usage drop, and the resulting glut, is primarily car driven. (no pun intended) Cars were already getting MUCH better mileage, which is why the turd had to weigh in (PRIOR to "stay at home" ). Got to get the price back up to assuage his big oil donors.

And yes, this SHOULD make way for "anything but oil", but Attention Deficit Disorder Americans forget next week what they should have learned this week.

We have to hope that the innovators out there will continue the search for alternatives, and not throw in the towel because of a temporary lull in gas prices.

I still want my home solar powered, and an electric car that I can charge off of solar power. I want to STOP contributing to the problem. (DAMN, those solar panels have to built somewhere, probably China, and the materials to make them are probably NOT earth friendly, the value of my home will go up, along with the taxes on it... quite a quandary... )

[FakeNoose]

26. It means they are overstocked at the supply level

The consumers aren't buying gasoline because #1 we can't go anywhere and #2 we have no money.

So the gasoline that was already refined and sitting in tanks isn't getting sold. Therefore, the refiners don't have to make any more, and they're going to lay their employees off and shut down for a few months.

[LudwigPastorius]

31. Setting aside long-term trends in the energy industry, I'm thinking...

it means we are entering a period of deflation that will look more like 1930 than 2008.

[duforsure]

33. Yes this is weakening them

And their power, and we'll see more renewables take over from them. Oil will soon be what coal is now, not preferred because its dirty energy.

[ResistantAmerican17]

11. Exxon gonna have to start offering a book of S&H Greenstamps

With every fill up!!!

[OAITW r.2.0]

24. I remember the stamps well. My mom was an avid collector and redeemer.

She thought it was "free money"...but my sisters and I were tasked with licking the stamps into the books. Bummer.

I expect that the creative financial games at the pump will be focused on sweeter deals...for gas card customers. By keeping their product at a higher price for those w/o their gas cards.

[C Moon]

18. Seeing that the economy, etc is now looking terrible...

at what point will Trump just rape our country of everything, and then sneak off to Russia in the middle of the night?

[BamaRefugee]

22. He did that 3 weeks ago. He hasn't left yet because he's basking in the rape afterglow.

[Jamastiene]

19. So, are they paying people to take it now?

How big is a barrel? Will it fit in a car?

[caraher]

28. Do you have a refinery?

Since this is crude oil it's probably not in a state fit to put in your car...

On the other hand, maybe you just want to store it and sell it back when the market recovers?

1 barrel of oil = 42 gallons. So depending on your car it might fit...

[trof]

23. $1.55 in coastal Alabama.

Never thought I'd see it below $2.

[Major Nikon]

27. Drill baby drill!

[duforsure]

32. With little oil being sold refineries will be next to shut down

With people getting laid off soon. I'm surprised the prices haven't dropped more to help lower the levels in storage. Until they lower the glut with drastic price cuts, and people are safe to return to work this will worsen for all oil companies. Once most refineries are down they will be slow to return. Starting them up is a longer and harder and a much more dangerous process. Some oil companies will go under from this. With the economy changing rapidly we may never see the same levels of oil needed again. After working in them for over 30 years , and retired, this will be causing major cutbacks , and permanent closures . I feel for all that are facing job loss. and uncertainty. I've been in their shoes before from being in a plant closed down having to transfer , and its not a fun place to be.

[Locrian]

34. oh noes

Those poor oil companies! Quick - how much stimulus / bail out money (tax dollars) do we need to send them?

[MosheFeingold]

35. Exxon an the international vos

Aren’t hurt that bad. Most of their production is priced in Brent Crude which remains around $25.

This affects the smaller local companies in New Mexico, Texas, Oklahoma, Louisiana etc.

From an environmentalist perspective, this is horrible as it makes renewable and zero emission energy — which were already more expensive — cost prohibitive. Few people will buy a Prius to save money on gas when gas is $1.50. (Counting inflation, that the cheapest ever. Cheaper than bottled water.)

Economically, we are in a weird place, the United States is the largest producer of oil in the world. It is a net exporter. So an oil price melt down hurts our economy, overall. Some middling price is better.

The main beneficiary is China. It is the largest importer of oil. It is also the worst environmental offender in the world, bar none. Given Chinas lies and genocide, I’m not particularly in the mood to help their government.

The cause of this is dumping by Russia and Saudi. The classic response to dumping a strategic product on a market to hurt a domestic industry is a tariff.

Let’s see if Trump has the balls to do it.

Or if Exxon is still calling the shots.

[uriel1972]

37. Trump will do whatever he thinks will protect his a$$...

Whatever that is. He is quite erratic, I think.