Well we officially have to pay for people to take WCS oil

[Cyle]

I don't know exactly how it works but I think they are paying to not deliver on the contracts. I don't think any product is actually being delivered for the negative price.

 

[ABMax24]

As much as I hate quoting the CBC this actually shows what's going on quite well.

The U.S. oil hub in Cushing, Okla., had 55 million barrels of oil in storage as of Friday, the highest level since 2018.
Monday's startling oil price plunge was caused by traders feverishly trying to offload the contract before they actually have to find a place to keep the oil starting next month. When the futures market closed for the day, the May WTI contract sat at -$37.63. If that price holds until the end of Tuesday, it means anyone holding that contract will have to pay more than $37 for the right to also hand over a barrel of oil in May.

https://www.cbc.ca/news/business/oil-price-monday-1.5538048

 

[Summitric]

So, if a guy had some extra cash laying around, would it be wise to invest in wti stock asap, and ride it out?

 

[ABMax24]

So, if a guy had some extra cash laying around, would it be wise to invest in wti stock asap, and ride it out?

You can't really buy WTI crude as such. You could buy an ETF or just oil company stocks. HOU or HOD are a couple ETF's I have come across on the stocks to watch thread.

 

[Cyle]

What I can't understand is with that kind of pricing, why aren't they dropping diesel prices to the floor? I guarantee if diesel dropped 20c a litre overnight they wouldn't have too much anymore, companies everywhere would be stocking up like crazy. I was looking at a 3,000 gallon tank myself if prices go low enough.

 

[adamg]

What I can't understand is with that kind of pricing, why aren't they dropping diesel prices to the floor? I guarantee if diesel dropped 20c a litre overnight they wouldn't have too much anymore, companies everywhere would be stocking up like crazy. I was looking at a 3,000 gallon tank myself if prices go low enough.

Why would they drop the price and lose profit, when they can keep you bent over the barrel? You're going to buy the same amount of diesel regardless of what they do with pricing.

 

[Caper11]

Its simple supply and demand. There is no more storage, companies are renting tankers to store the crude, at 165k a day will get expensive. Need to get the demand back up

 

[Cyle]

Why would they drop the price and lose profit, when they can keep you bent over the barrel? You're going to buy the same amount of diesel regardless of what they do with pricing.

A drop in price would cause a massive spike in demand right now with people stocking up. And it would free up storage for a bit until things start back up and demand goes up. Like for me, 3,000 gallons would last me almost a year but I would buy it in 1 shot if it was cheap enough.

 

[freeflorider]

Well I’m really pro industry, but when it comes to playing games to hose the consumer I’m not on board. Weather its logs or the oil patch and especially the government. I love to see tough times eating at them, Oil companies that make outrageous profits in the good times sure cry when they take a hit now. Fat cats and governments that don’t want to loose there cash cow need to take a little on the chin too.
so I hope government looses on taxes and the boys on the top floors will have to sell at zero, then I’ll be happy till we all get back to work and be profitable together.

 

[ABMax24]

First off, the oil prices today are crude for May delivery, second off the prices haven't settled yet on that, these are May futures, the prices will be set at end of day tomorrow. These futures are also only a small portion of the total crude that will be delivered, most of the contracts are already locked in.

We won't see fuel prices halve overnight from this, in the short term they should go down though. These crude prices are a very short term blip as an extreme over reaction to oversupply. I'd expect in the coming days we'll see crude prices return to the $10-20 dollar range.