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jhm
Well-Known Member
Yes, the Irvine project was only posible because the California ISO is not an interstate market. But now this ruling extends this to all the interstate markets.
So behind-the-meter storage will have an opportunity to compete in the wholesale markets and earn wholesale prices for peak power. But the capital decisions to place storage behind-the-meter is not constrained only to be based on profiting only from these wholesale markets. Thus capital brings storage to the market below the full cost of installation.
For example, the Irvine hotels forming this virtual peaker are mostly justifying the cost of the system on avoidance of demand charges, so whatever they make time shifting or responding to peak demand in the wholesale market is gravy. It is unlikely that a dedicated utility battery peaker could bring peak capacity to the maket at lower cost than behind-the-meter batteries are willing to offer. That is a dedicated battery peaker would not be able to earn retail peak shaving revenue and so would be relatively under utilized.
Batteries need to be placed where they can arbitrage multiple markets and realize multiple revenue or value streams for their owner. So batteries are most valuable when they are paired with other primary uses.
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jhm
Well-Known Member
Yep, oil investors tend to lust after military drama to boost the price of oil.
But this too is a good opportunity to see how unprecedented oil storage capacity moderates the impact of military strife.
Suppose a military conflict were to shut down 3 or 4 mb/d of oil supply. The spot price of oil would jump up to $50 or more. This would motivate producers to drill faster. This accelerated drilling would bring more supply to market a year later. The storage investors will soak up the price boost in the short run. 3 billion barrels in storage drawn down 3 mb/d is sufficient for 1000 days. This is plenty time for oil producers to bring an extra 3 mb/d of supply to market. There is really no need for the price of oil to go back to $100 unless the futures market goes haywire and places $100 spot price in contango with futures rising to $160 or so. This was the sort of situation that drove the price of oil to $147 in 2008, but it also lead to a monumental price crash within a year. So producers really should not lust after that kind of price action. It is better just to recognize that a 3 billion barrel inventory gives producers about 3 years to bring add 3mb/d of supply to market. The military catalyst that triggered the whole thing could also resolve in that time frame too.
Obviously the market is going to go through whatever craziness that it will. The question for investors is how to play that. I suspect that oil storage hedge investors stand to make the most money off this enormous glut. They buy up cheap inventory and lock in profitable futures. If the price of oil in 2.25 years is still $30, but you sold a $43 contract, you're making money even while the rest of the industry is still going bankrupt. If some sort of military disruption drives oil over $100 spot and futures jump to $200, you lock in that future price and store oil. Volatility in the market is actually your friend.
One other thing I would add is that as oil producers default and go bankrupt, banks will wind up owning oil wells. Banks are smart enough to work through the financial option of placing the output of these wells into storage and they've got the financial means to do so. They know that this surplus supply needs to be taken out of the market for a few years. Indeed, one of the better workouts for an oil producer in default is for the bank to take produced inventory in lieu of payments and place that inventory into storage. The oil industry might not like this because they would prefer other oil producers to capitulate so they can get back to making lots of money. Massive storage minimizes capitulation and dampens future opportunities for surviving producers. So producers might not like the banks putting inventory away into storage, but banks will prefer not to take massive losses on bad loans and are incredibly patient making boring money.
While this number can change, sometimes dramatically in a day, 'option max pain' is $200 to start the day. In addition, FB strong showing yesterday (and into today) and hopefully strong AMZN at close today will help float up all boats.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
@jhm: interesting calculation with regard to oil price bottoming out and stabilizing due to arbitrage opportunities in storage. You laid out the case for the arbitrage using the example of "June 2018 future is at $43.70 and the March 2016 is at $31.87" and how you could quite easily make 20% ROE by financing storage. Doesn't this mean that the the market is pricing (time value) of the futures wrong (too high?). Or another way to see it is that the market is still pricing in an expected return to higher price/barrel as part of the time value?
dreamingof3
Member
I noticed as we approach the 52 week low the shorts are out and mocking. You can tell who they are I just choose not to acknowledge them. Oil up, Naz up 1%, tesla down 1.79. Sigh-we are now down $57 a share in less than a month. Does someone big know something?
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Causalien
Prime 8 ball Oracle
Heh yeah. The hidden elephant in the room we do not want to discuss. The shorts got it right this time, but not for the reason any of these twitter paper millionairs claim.
What I am curious about right now is the decision to outsource the falconwing door deaign when they could've done it in house. It indicated some type of problem at the decision making level.
They only get it right if they realize and cover, just like you didn't lose until you sell. We don't know if they did yet. Greed goes both ways.
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Note that... at around this same time the Falcon 9 Rocket had a problem with a strut supplier. I have a theory that as these companies were getting bigger, Elon was pressured by members of the management team to ease up a bit in the sense that some suppliers needed to be "trusted" more. Probably happened at both ends. Now... they are probably going to go back to what Elon says.
Scott Ales
Member
I am officially out of here folks.
Liquidated all my positions just now. Moving on to more controlled investment projects. Certainly enjoyed interacting with everyone and wish you all the best.
Had to take my losses and move on before the account was completely empty!
I learned quite a bit over the last year and look forward to applying it constructively in the future. Just not in this venue. It's for the pros and I am certainly not one of those!
Best to all!
Liquidated all my positions just now. Moving on to more controlled investment projects. Certainly enjoyed interacting with everyone and wish you all the best.
Had to take my losses and move on before the account was completely empty!
I learned quite a bit over the last year and look forward to applying it constructively in the future. Just not in this venue. It's for the pros and I am certainly not one of those!
Best to all!
For sure, the stock is moving in the direction of a flawed bear thesis and for reasons that have nothing to do with it which is why most of these (insert expletive of choice) people will still be clinging on for dear life all the way up again.
Note, that the FWD was not outsourced. That was poor journalism. The actuator was outsourced around which the rest of the FWD design was produced. If there was poor management on Tesla's part it was to take the suppliers word for something mission critical without testing it. Same as the SpaceX strut (and at about the same time at a guess). Lesson learned no doubt.
Gerasimental
Member
CyberDutchie
Active Member
This is just horrible stock performance, so disappointing. It means I have to cancel my X order and lose my deposit. I'm not a whealty guy, I need the stock to be at $250 level to be able to go through with the purchase of a vehicle that costs $125K. I was counting on a new ATH this summer but now I don't see how in the world this stock could even get back to $250 level at that time.
Election year is historically always bad for the stock market. Too much negative sentiment and doom and gloom talk by the media and by the republicans who cannot accept that Obama actually got the country out of a recession. So I don't expect the general stock market recovering either. And when it does, as we have seen this week, there is no guarentee that TSLA will follow the market.
I always liked to read the bull posts here that talk about all the upcoming catalysts for the stock and how there is a next short squeeze in the making. However, today is one of those days where I pull my hairs. For the year, my portfolio is down the price of a well configured Model X. It feels like we need a miracle for me to become the owner of a Model X this year.
Election year is historically always bad for the stock market. Too much negative sentiment and doom and gloom talk by the media and by the republicans who cannot accept that Obama actually got the country out of a recession. So I don't expect the general stock market recovering either. And when it does, as we have seen this week, there is no guarentee that TSLA will follow the market.
I always liked to read the bull posts here that talk about all the upcoming catalysts for the stock and how there is a next short squeeze in the making. However, today is one of those days where I pull my hairs. For the year, my portfolio is down the price of a well configured Model X. It feels like we need a miracle for me to become the owner of a Model X this year.
I like Tesla alot and have huge confidence that Tesla will succeed big time in future. But the sp fluctuations are just too absurd. Elon Musk could do a better Job with his Forward looking Statements in order to make sure the stock Price doesnt fluctuate that much. Thats really annoying me. For example as another tech stock, FB Mark Z. is doing a way better Job in that.
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