Oil is selling in Negative Numbers

Oil prices dropped 321% on Monday.

It’s crazy. One thing that article didn’t discuss is that today is the last day for the May contract, which is the actual reason the price went negative. The June contract is at $21/bbl. So it’s not QUITE as bad as the article makes out, but it is bad.

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About 15 years ago, when oil prices were rising,the stock market would tank (higher costs for transportation, manufacturing, etc).

Now, when oil prices go down, the equities markets go down. Is this because the U.S. has been exporting oil?

Our gas prices are low, $1.17/gallon at Sams…don’t forget the taxes. Average wholesale gas price was $0.71/gallon on Friday, our TX total gas taxes are about $0.40, so that leaves $0.07 left over. Not much, to me.

My mistake, $1.15/gallon at Sams and Costco.

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True… but what did I say about defending those damn oil companies @texases ? You are correct however…as usual. I guess I was looking for a 300% reduction at the pump… which I have no idea what that means or what number that represents… I need to ponder that i think.

If you find a gas station paying you to take their gas, let us know!

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I guess that is what a 300% reduction would amount to …No? lol… I dont see being paid at the pump anytime soon sadly.

That’s exactly right, and that’s what was happening for a some of the oil trading hands today. It was the second to last day of a ‘futures contract’, and folks stuck with “May” oil today were paying folks to take it off their hands because storage is so full and the demand is so low. The new contract for June is around $21/bbl.

Here’s more:

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http://download.stream.publicradio.org/podcast/marketplace/segments/2020/04/20/mp_20200420_seg_16_64.mp3 the first segment of today’s ‘Marketplace’ is a good explanation, 2 minutes

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The equity market simply doesn’t like uncertainty.
Prices swinging wildly, up or down, cause panic.

The other thing to consider is the cost involved in refining oil to usable product and getting that product to the consumer. Regardless of the price of crude, that doesn’t change the cost to refine it or transport it. Yeah plus taxes.

I filled up last night and it cost me $7. True I didn’t need that much but still $1.38 was pretty cheap. There was a time when it cost me $25 a day.

keep in mind in our wonderful state we have the 2nd highest taxes on gasoline and diesel…

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Unfortunately that can change.

@pyrolord314 well what else would you expect from one of the most corrupt states in this country? I expect nothing less…and furthermore I wonder why we aren’t being punished further…oh wait…we are.

Right now in Andover MA there seems to be a price war going on between BJ’s Warehouse and Irving Gas station about 1/2 up the road. BJ’s regular is at %1.39. Irving is $1.50. Everyone else is $1.90 or higher. I live over the border in NH and our gas at Irving is $1.89…and we have $0.08/gal LESS tax then MA.

Hell that’s been going on in Harrisburg for decades now. Doesn’t matter who’s the governor

In related news, construction of the Keystone pipeline is once again on hold. I wonder how long that will last, and why the company still wants to build it.

This is how we react to this kind of news in the age of the internet; we make memes.

essential_oils

pallbearers

monkey_barrel

goya

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Heh heh. Ya gotta think longer term having ridden through a number of booms and busts. Price goes up everyone wants to get a small car, electric car, or bike. Can’t think of anything else except how to save gas and mpg. Price goes down? Everyone is stuck with their small cars and looking for the station with the lowest price. Both cars are full. The lawn mower is full, and all I’am down is 2 1/2 gallons in my 5 gallon gas can. Too bad for me, but I’m not going to go out and buy another $20 gas can to save $5. I’ll just ride it out like I have been doing for 50 years. Just remember back to the days when you could only buy gas with odd/even license plates? This is better except the reason is everyone is scared stiff and not going to work, or play, or to restaurants. This too will pass.

By the by, I saw a guy in a big $60,000 or so pick-up yesterday and on the window in big letters was “financial mistake”. Life lessons are sometimes expensive.

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And investment bankers can buy that oil with money they borrow and they’ll get paid to borrow it. Ain’t the FREE MARKET great!