[vtsnowedin]

It would be interesting to know the actual price the Chinese are paying for that Russian oil.

[JuanP]

$this->bbcode_second_pass_quote('vtsnowedin', 'I')t would be interesting to know the actual price the Chinese are paying for that Russian oil.

[evilgenius]

$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'N')ow, the Canadians have room to participate in the markets in ways they may not, if Venezuela could get their heads out of the dirt.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'A')nd now Canada can't take up the slack.

[REAL Green]

Sorry this is zerohedge but a powerful look at an imploding oil industry:

"We Are Moving Into The End-Game": 27 Tankers Anchored Off California, Hundreds Off Singapore As Oil Industry Shuts Down”
https://www.zerohedge.com/markets/we-ar ... stry-shuts

“The economic impact of the coronavirus has ripped through the oil industry in dramatic phases, Bloomberg's Javier Blas writes. First it destroyed demand as lockdowns shut factories and kept drivers at home. Then storage started filling up and traders resorted to ocean-going tankers to store crude in the hope of better prices ahead. Now shipping prices are surging to stratospheric levels as the industry runs out of tankers, a sign of just how distorted the market has become. Ironically, in its latest attempt to kill off shale, Saudi Arabia may have gone a step too far, as "the specter of production shut-downs - and the impact they will have on jobs, companies, their banks, and local economies - was one of the reasons that spurred world leaders to join forces to cut production in an orderly way. But as the scale of the crisis dwarfed their efforts, failing to stop prices diving below zero last week, shut-downs are now a reality. It’s the worst-case scenario for producers and refiners." In short, the entire oil production industry is shutting down, not because it wants to - of course - but because it has no choice. According to Goldman, in as little as three weeks there will be literally no place left on earth to store oil, and unless oil producers want to pay "buyers" to hold the oil as happened on that historic date of April 20, they have no choice but to shut in output. "We are moving into the end-game," said Torbjorn Tornqvist, head of commodity trading giant Gunvor Group. "Early-to-mid May could be the peak. We are weeks, not months, away from it."

[Darian S]

$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'A')nd now Canada can't take up the slack.

[rockdoc123]

$this->bbcode_second_pass_quote('', 's')o much? Not so much, only reason is due to demand destruction from the pandemic.

[sparky]

.
available numbers suggest storage in the US will be full by the middle of June
Cushing is reported as 60% but the remaining 40% are contracted already ,
I suppose some extortionate deal can be obtained ,there probably will be stories of some guy with a n old barge making millions

https://www.bangkokpost.com/business/19 ... age-demand

[sparky]

.
From Kate Teasdale of Oxford energy on the problems with the WTI index
her proposal is to investigate using WTI Houston fob as a better marker
also a warning that while unlikely ICE Brent going negative would be a much bigger problem

A fundamental flaw in the design of its (CME’s) WTI contract, in particular the rules restricting
physical delivery to Cushing.
Normally, this does not impede delivery for WTI futures contracts.
Butpipeline access to and storage at Cushing is almost impossible to obtain for next month,
while capacity is still available elsewhere…. Since CME knew this might happen
— writing to clearing firms and clients two weeks earlier to say options contracts could handle negative pricing —
the exchange could have acted to avoid disorderly pricing by ensuring that all open contracts could make or take delivery and closing out

Finally, PRAs should intensify efforts towards waterborne WTI contracts.
One candidate could be WTI fob Houston, which reflects cargoes that are loaded for export at the US Gulf Coast.
the differential of WTI fob Houston price to ICE Brent was more stable than the pipeline-based grades
such as WTI Houston (MEH) in the period when WTI prices went into negative territory.
The WTI Houston (MEH) only partly compensated for the slump in the futures
and while it was almost $18 per barrel higher than the futures price, its value was still negative.
Identifying an appropriate waterborne WTI contract is a long-term project that applies to all the market players
and this task is far from straightforward.

The Brent benchmark has remained relatively insulated from the dislocation of WTI, as Brent is a
waterborne crude and is not constrained by the logistical problems encountered by the WTI contract.
The Brent terminal at Sullum Voe has storage capacity of just over 30 million barrels. However, being
a waterborne terminal, theoretical storage capacity for the contract includes all the shore tanks in North
West Europe plus potential shipping storage.
While we live in ‘unprecedented’ times when all records are being broken,
it is highly unlikely that we shall see negative prices in the ‘Brent’ contract.
The brunt of the demand loss is being taken up by the quality differentials and Dated Brent.
Brent spreads have reflected the weakness of the front end of the market
as well as the uncertainty of the demand recovery.

While the market may expect the June WTI contract to price negatively again, an unlikely negative
pricing of Brent would represent a much bigger event.

[sparky]

.
Rystad Energy a well respected Norwegian oil industry research group has released a paper on the US oil industry

the prediction are dire
a decrease of 1 million /B.d for May , 2 millions by july , 3 millions by October
drilling is in a state of collapse

good reading try it

https://www.rystadenergy.com/newsevents ... -persists/

[vtsnowedin]

At this rate they will be pouring it back down wells just to keep from polluting the ground with it.

[sparky]

.
Opec+ is talking of extending the proposed cuts after July

https://www.reuters.com/article/us-oil- ... SKBN22O2AH

" OPEC and its allies, led by Russia, who are known as OPEC+, agreed in April to cut output by 9.7 million bpd for May and June, a record reduction.
While producers will slowly relax curbs after June, supply reductions will remain to April 2022.

“The ministers want to keep the same oil production cuts now which are about 10 million bpd, after June.
They don’t want to reduce the size of the cuts.
This is the basic scenario that’s being discussed now,” one OPEC+ source told Reuters."

[sparky]

.
from news agencies

"The EIA now expects world oil demand to fall by 8.1 million barrels per day this year to 92.6 million
compared with a previous forecast for a drop of 5.2 million bpd.

The statistical arm of the U.S. Department of Energy also expects U.S. output to fall by 540,000 bpd,
against a previous forecast of 470,000 bpd.
It expects global output of 11.7 million bpd this year and 10.9 million bpd in 2021.

The Organization of the Petroleum Exporting Countries also slashed its world oil demand forecast, now expecting it to contract by 9.07 million bpd this year, it said in a monthly report. Last month, OPEC expected a contraction of 6.85 million bpd.

OPEC+ agreed to cut output by 9.7 million bpd in May and June and to scale back cuts to 7.7 million bpd for the rest of the year.

it is reported that Saudi Arabia had pushed production to more than 12 .0 million bpd when the last cut agreement collapsed

the price have been somewhat steady just below 30$ a barrel for ICE Brent and 25$ Nymex

[vtsnowedin]

I've noticed traffic picking up a bit. $1.85 gas and drive around listening to the CD player gets you out of the house and away from the kids for a while. Hope parents are taking turns so the kids don't trash the house while they are gone. Sucks to be a single parent.

[REAL Green]

$this->bbcode_second_pass_quote('vtsnowedin', 'I')'ve noticed traffic picking up a bit. $1.85 gas

[sparky]

.
Oil price are slowly emerging from the coma , stocks are being trimed somewhat from a glut down to a plenty

https://www.spglobal.com/platts/en/mark ... ebalancing

however this is just finding the "new normal " , there is 9 million bd of production which is being held back until October
same cause same effect , but not so violent
it's a safe bet than as soon as the price stabilize at an acceptable level production will , again , surge
one can speculate than 40 $ Brent and 30$ WTI should see at least 5 million bd of extra production on the market
if there is a market , the big "if"

[vtsnowedin]

It would not surprise me a bit to see an unprecedented level of cooperation to balance supply with actual post Covid demand to keep as many of the oil producing countries as possible solvent. They have no better option so it will be participate or starve.

[sparky]

.
Certainly most of the oil producing countries are big customer for manufactured goods ,
then going belly up would do no good to a world recovery

[REAL Green]

$this->bbcode_second_pass_quote('vtsnowedin', 'I')t would not surprise me a bit to see an unprecedented level of cooperation to balance supply with actual post Covid demand to keep as many of the oil producing countries as possible solvent. They have no better option so it will be participate or starve.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I')t would not surprise me a bit to see an unprecedented level of cooperation to balance supply with actual post Covid demand to keep as many of the oil-producing countries as possible solvent. They have no better option so it will be participate or starve.