GRG55: Oil Crashing

[Woodsman]

Re: GRG55: Oil Crashing

CARBON FREE, AT LAST!

Of course, since it will be impossible to extract, ship, and store oil at negative valuations, we'll have to go back to a preindustrial civilization where its biggest use will be to line the hulls of our seagoing sailing vessels. That is after we settle down following the mass die off of the population due to global famine from the loss of chemical fertilizers. But hey, you know what that means?

Yesss! ZERO POPULATION GROWTH! Another UN/Club of Rome goal achieved.

Oh Corona, how we thank you! These lockdowns are a heck of a thing, no? Ain't unintended consequences a bitch?

[jpatter666]

Re: GRG55: Oil Crashing

Art Berman was on macrovoices on 5 April. He said:

https://www.macrovoices.com/guest-co...chartbook/file

Berman blew a lot of his credibility calling for gas prices to spike because the wells were uneconomical. GRG55 hit that one on the head as I recall saying that Berman failed to take into account technological advance.

[Woodsman]

Re: GRG55: Oil Crashing

Turns out peak cheap oil meant something entirely different! Oh King Hubbert, we hardly knew ye.

Why is this man smiling?



Oh, that's why.

While COVID-19 is causing untold suffering, the international response to this unprecedented health crisis in modern times offers an opportunity to direct finances towards bolstering climate action. GCF will continue to make critical investments in climate-resilient water resource management, health care facilities, agriculture and livelihoods – all of which are essential to subduing and overcoming the pandemic. Similarly, we will step up our efforts to catalyse green investment to relaunch economies on low-emission, climate-resilient trajectories.
https://www.greenclimate.fund/news/r...and-prosperity

Crush the economy and relaunch without CO2. Aye, Corona!

All it took to achieve the green dream was a few weeks of lockdown. Now oil prices have collapsed, the auto industry is wiped out. Heck, even CO2 production for beer and soda is circling the drain. Fortunately for Bill and his cohort, Champagne is naturally carbonated. Won't it be awesome to return to feudalism, be a serf, and tend to Bill's grapes?

Hey, globaleconomicollaps! Remember when you asked "how many would you sacrifice?" As it turns out it looks like we saved a hypothetical 2 million people at the cost of about 2/3rds of the human population! You know, risk/reward, that kinda stuff.

[globaleconomicollaps]

Re: GRG55: Oil Crashing

Turns out peak cheap oil meant something entirely different! Oh King Hubbert, we hardly knew ye.

Why is this man smiling?



Oh, that's why.



Crush the economy and relaunch without CO2. Aye, Corona!

All it took to achieve the green dream was a few weeks of lockdown. Now oil prices have collapsed, the auto industry is wiped out. Heck, even CO2 production for beer and soda is circling the drain. Fortunately for Bill and his cohort, Champagne is naturally carbonated. Won't it be awesome to return to feudalism, be a serf, and tend to Bill's grapes?

I never would have taken you for a socialist. Greetings comrade!

[Woodsman]

Re: GRG55: Oil Crashing

I regret to inform you that having collapsed the global capitalist/industrial system, socialism is herewith cancelled. But feudalism will be AWESOME, dude!

[globaleconomicollaps]

Re: GRG55: Oil Crashing

I regret to inform you that having collapsed the global capitalist/industrial system, socialism is herewith cancelled. But feudalism will be AWESOME, dude!

I can't believe this is only Monday.

[shiny!]

Re: GRG55: Oil Crashing

Some day, when this is all over, I'll find some excuse to visit Hades/Arizona and you and I can share some with coffee! Without the masks.

It's a deal!

[Woodsman]

Re: GRG55: Oil Crashing

I can't believe this is only Monday.

So do you think there will be a coup in Saudi Arabia or will there be intra-state conflict of some kind to serve as a distraction. Lots of people living on the Royal largess there and without a functioning oil market, unless they figure out a way to turn crude into falafel, things are going to get tense, what with state revenue dropping to, oh I don't know, zero?

Then there are the other gulf states in similar circumstances. And Russia, armed with nukes and a fairly robust military. Can't say I have a clue on that one. Closer to home, Venezuela might consider getting its forces on alert, post haste. Or maybe just surrender now and avoid the rush? Hmm, so many little chess pieces all over the table now that the board has been thrown upside down. The CCP is probably thinking something like "whoopsie" right now and once President Xi crawls out from under the table and composes himself, I wonder what he'll do? I mean, other than not taking the fall for the collapse of the global economic and soon to be political system, that is.

The Republicans and the Democrats seem to have agreed that even if they hate each others' guts, they damn well better convince a soon to be hot and hungry American people that ChiNA! did it, otherwise we'll have a Bonus March every week until Christmas. Good thing all those national guard and reserve units were called up last week. Gee, you think they had some foreknowledge that the shite was going to hit the fan? Naw!

[shiny!]

Re: GRG55: Oil Crashing

and just like that... the contract rolled over and oil is up 152.39% to $30.63.

And it's still only Monday.

[GRG55]

Re: GRG55: Oil Crashing

spot at 0.05, june at 21.79. cushing is full and there are 7 big saudi tankers on the way to the gulf coast. mission: smash the shale business.

Cushing is still some ways from being full. But the capacity is booked. No prizes for guessing who.

Yes, the mission is to smash US oil. But the perpetrators are now the sharks from Wall St (JPM, Goldman, et al) who are in their usual feeding frenzy when there is blood in the water. They always make money no matter what the consequences for the productive economy.

There was a steep enough contango in March, on the initial break in oil, for the arbitrage to pay. As the contango flattened the play became less lucrative and then unprofitable (costs to handle & store the oil exceeded the spread). This is round two. Where they smash the near month to drive the arb.

Oil used to be far too large and too deep a market (its by far the biggest $ volume traded commodity) to be moved by the purely speculative financial traders. It was a risk management hedging market for consumers and producers. Now the amount of money sloshing around under the management of the Wall St investment bank trading desks means they can often run the table in their favor.

I pity anyone foolish enough to be holding USO, or similar.

[globaleconomicollaps]

Re: GRG55: Oil Crashing

Hey, globaleconomicollaps! Remember when you asked "how many would you sacrifice?" As it turns out it looks like we saved a hypothetical 2 million people at the cost of about 2/3rds of the human population! You know, risk/reward, that kinda stuff.

The economy was old and sick and it was going to die anyways.

[shiny!]

Re: GRG55: Oil Crashing

Up 198% at $39.83.

It's a whirligig of fun!

[GRG55]

Re: GRG55: Oil Crashing

The economy was old and sick and it was going to die anyways.

That would describe France perfectly. Not so much the USA, to the degree you might have imagined.

But now, once this mess is all over, that gap will be less. Much less. Perhaps even indistinguishable.

Soon we will all be Millennials, working in the global gig economy. Aspiring to a coveted and secure civil service job with steady pay and a defined-benefit pension. And with the USA having the same high structural youth unemployment rates as Europe has become accustomed to in recent decades.

As ironic as this may seem, China appears destined to come out of this virus episode positioned to benefit the most.

[thriftyandboringinohio]

Re: GRG55: Oil Crashing

...Oil used to be far too large and too deep a market (its by far the biggest $ volume traded commodity) to be moved by the purely speculative financial traders. ... Now the amount of money sloshing around under the management of the Wall St investment bank trading desks means they can often run the table in their favor...

That's a sobering thing to realize. Even the global oil market - taken as a whole - is too small and weak to withstand the Wall Street boy's if they decide to pillage it.

[Woodsman]

Re: GRG55: Oil Crashing

The economy was old and sick and it was going to die anyways.

Well, congratulations on cashing in all those shorts! How's it feel to be a gazillionaire?

Pretty sweet, I bet.