Can somebody explain -$37.63 oil?
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stimulus money equals free gas 0 -
All of this started well before Coronavirus.
Russia has been going at it with Saudi (OPEC) for months.
Russia trying to kick the legs out from under KSA by removing the only economic strong suit they have. KSA in turn was trying to devalue the entire Russian federal budget by suppressing the cost of oil. (If your national budget is based on oil at 55 a bbl and it sells for $35 a bbl, you wind up a few hundred billion short at the end of the year...
So both were playing the same game. Smaller economies with large GDP accounted for by oil therefore had to follow suit (Venezuela, Angola, Nigeria, Iran, etc, etc.)
Pump up production and lower cost, just to keep their heads above water.
Everyone was waiting for Russia or OPEC to back down when the unthinkable hit- Coronavirus, which drastically slashed demand for oil globally and millions upon millions of barrels have built up in reserve everywhere in the world.
Even when the world goes back to work, all countries will be desperate to offload their excess oil, which will further over saturate the market.
Worse, everyone is also going to want to financially recover which will globally rachet production back up in a battle for the demand that does exist.
It can’t just get back to normal, and that is the problem.
It will destabilize many governments whose only hope was oil.
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The negative dollar amount is because it is so cheap the supplier actually has to pay the receiver to offload the haul.
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No ones using it there's no demand so it's cheap. 0 -
A pizzin match between two Countries that happened at the wrong time.. 0 -
WTI is back up to + $1.35 now.
+ $38 and change after closing
They must have worked out something on using 75,000,000 barrels of storage in the strategic oil reserve.
Mule
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Exactly!! Then toss in the Chinese virus where people rarely drive and you have created the perfect storm.Warbirds said:All of this started well before Coronavirus.
Russia has been going at it with Saudi (OPEC) for months.
Russia trying to kick the legs out from under KSA by removing the only economic strong suit they have. KSA in turn was trying to devalue the entire Russian federal budget by suppressing the cost of oil. (If your national budget is based on oil at 55 a bbl and it sells for $35 a bbl, you wind up a few hundred billion short at the end of the year...
So both were playing the same game. Smaller economies with large GDP accounted for by oil therefore had to follow suit (Venezuela, Angola, Nigeria, Iran, etc, etc.)
Pump up production and lower cost, just to keep their heads above water.
Everyone was waiting for Russia or OPEC to back down when the unthinkable hit- Coronavirus, which drastically slashed demand for oil globally and millions upon millions of barrels have built up in reserve everywhere in the world.
Even when the world goes back to work, all countries will be desperate to offload their excess oil, which will further over saturate the market.
Worse, everyone is also going to want to financially recover which will globally rachet production back up in a battle for the demand that does exist.
It can’t just get back to normal, and that is the problem.
It will destabilize many governments whose only hope was oil.
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