adiggs
Well-Known Member
I agree with the overall tenor - especially that at least some US frackers have sold most of their future production for at least a few years out at really awesome prices. They will have the ability to mine as much as they can. Or at least close up shop and sell off their futures contracts to somebody else for a nice profit (I don't trade futures - I assume that they can work that way at least).Now that covid has dropped to nearly zero in the US, and all the US frackers have sold tons of crude futures contracts, how huge do you think our oversupply will be around Memorial Day? I'm calling another <$0 WTI day before July 4th.
I also agree with the massive oversupply, but the <$0 WTI day required a set of very specific market circumstances that, my understanding, has been removed. Specifically a huge amount of the monthly contracts being traded by a single entity (like 1/3rd of the market), that could not under any circumstances take physical delivery, with the trades happening in a public and programmed fashion that the rest of the market could easily front run. That entity (SCO) doesn't work that way any longer; it also isn't a good proxy for trading the spot market any longer either.
Really really low $/bbl prices - I think we'll need another war as an antidote for that.