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MTL_HABS1909
Active Member
MTL_HABS1909
Active Member
MTL_HABS1909
Active Member
MTL_HABS1909
Active Member
dc_h
Active Member
Sure would like to see some of the Covid money go to shutting down uneconomical and higher polluting fossil energy sources. The US Gov't could probably buy out the rest of the coal producers with a commitment to pay for cleanup and provide jobs to miners cleaning up old mines and building wind farms. The same and more with tar sands. Their market will not return; ever. Closing weak producers and reducing incentives for the rest will reduce the pain of transitioning to sustainable energy. The cost of buying out may never be cheaper.
Question for those in the know:
At current negative prices ($>10), if these hold for some time, and assuming a few bucks for the price of a metal barrel and transport, why would some entity not just fill up millions of such barrels and stick them on a cheap piece of land somewhere? Paid for by the price to take the oil off the suppliers hands?
At current negative prices ($>10), if these hold for some time, and assuming a few bucks for the price of a metal barrel and transport, why would some entity not just fill up millions of such barrels and stick them on a cheap piece of land somewhere? Paid for by the price to take the oil off the suppliers hands?
Mo City
Active Member
These are May futures, which will be irrelevant shortly. June and beyond are over $20.
willow_hiller
Well-Known Member
It costs money to store the oil, and the supply of oil storage has essentially run out.
Indeed, that was already stated in the question. Conventional storage methods have run out.
So is the assertion that it costs more than $10/barrel to store oil with unconventional methods as described? More could technically be created as described, not efficiently, so it would be a question of price. If so, what might be that price? Perhaps regulations are a part of this mix as well.
trix
Member
$-35 a barrel... does that mean they will pay me $35 million if i take 1 mil barrel of oil? I'm a bit confused.
The assumption is it would likely cost you 35 bucks to transport and store a barrel. So in theory yes i guess.
Haha haha!!!!! And on 4/20 day!
enjoy the simulation.
enjoy the simulation.
As someone who cares about the environment, if they run out of storage do they just throw oil on the ground like milk producers do when it’s worthless? Isn’t it difficult and time consuming to turn off a rig?
My understanding is that it is easy to turn off a well but it then costs a lot to restart the well and may not restart at all without more drilling.
Could see a country like China (remains a very large net importer of oil, central government proven powers to direct rapid building of large projects, low environmental and other regulatory red tape hurdles, etc.) to be quite interested in quickly finding ways to soak up free+ oil as they would project need to use this for many years from now.
That would further portend future low oil prices as future demand for new oil would be softened.
Indeed it is WTI negative at the moment, but at these prices...
This is all quite interesting to watch unfold.
That would further portend future low oil prices as future demand for new oil would be softened.
Indeed it is WTI negative at the moment, but at these prices...
This is all quite interesting to watch unfold.
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TheTalkingMule
Distributed Energy Enthusiast
These are just the last few contracts of May delivery. I don't know how it works, but maybe these -$35 contracts require you to take delivery on something like May 7th and that's now just become physically impossible. A vessel simply can't get there in time.
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Developed oil fields require maintaining a pressure gradient toward the well (collecting) head. It can take some time and lots of effort to re-establish that flow once it has stopped, and you may possibly never re-achieve the flow rates that once existed.
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