Oil Prices Fall To $32/Barrel... To Stay Very Low For Now

[Economy 52,840]

https://www.google.ca/amp/s/amp.cnn.com/cnn/2020/03/11/business/oil-prices-saudi-arabia/index.html

 

A combination of lower demand from Coronavirus + A Russia/OPEC production cut deal that ended around the same time has caused the oil market to collapse

 

Saudi Arabia has also announced they will surge production since the deal ended by over 2 Million barrels a day

 

There is further speculation that OPEC and Russia are not only at war for Oil marketshare with eachother but also want to cripple the US Shale industry to its knees that is already struggling and cannot survive $30 Oil for very long

[weed 78,877]

it's now $1.97 a gallon where I live rn!! has been ~2.30-2.60 for the longest I feel

[Economy 52,840]

7 minutes ago, weed said:

it's now $1.97 a gallon where I live rn!! has been ~2.30-2.60 for the longest I feel

Where I live it's about 87 cents per litre

 

It hasn't been below $1.00 in ages

[Morphine Prince 109,648]

Price dropped from $1.96 to $1.84 overnight per gallon where I live. 

[Stanley Digaga 975]

Price dropped for about 10% in France.

I refuel my car last week 

[xoxo Craig 55,649]

Does that mean it will get cheaper? 

[Gagaloo911 12,959]

So cheap gas for all! We love to see it 

The only good thing to come from this mess, along with hopefully hurting Trump's re-election with his adminstration's disastrous response to it

[Chromatic Lover 868]

The Saudis did this in 2014 to push US shale producers out of business. They failed miserably given that the US was able to adopt and produce the shale for cheaper. While the flooding of oil in the markets is due to Russia not meeting the Saudis demands, the US will benefit in the long term as our shale producers will now find a way to produce it for even cheaper. Hate capitalism all you want, but if it's one of the many things the Americans are good at is making money. The benefit though is that gas prices should become cheaper for consumers. However, renewables and other alternatives would suffer as it won't be able to compete with cheap fossil fuels if prices stay too low for too long. 

[GaGaAst 13,124]

Inb4 oil becomes the next toilet paper. 

Katy is going to receive gas in her next concert, an upgrade from today's toilet paper. 

[Teal Ambition 47,805]

I actually managed to put premium gas below $1.00/L today  This is the first time I've ever seen it this cheap since I've gotten my car

[Luc 4,776]

I'm just thinking... no painting, no cars, no flights, little production and little shipping for the next two months in Europe and perhaps one month in China seems realistic. The US is probably the biggest market, but considering they're royally ****ing up, we can expect similar markets. The only way such a decline in demand would not drive down the oil prices even much lower would be if oil producers stop because their employees get infected with the virus. But there's a sort of prisoners' dilemma between Saudi Arabia and Russia in stopping oil production if employees get infected, similar to the Biden vs. Bernie dilemma who would stop rallies first. I'm not going to buy and bet on higher prices, oil prices could go much lower if Saudi Arabia and other Gulf nations manage to contain the virus (don't think Russia is capable of controlling it tbh, their numbers already seem way off), while the oil doesn't get sold because the rest of the world is literally not using any oil.

[LilMonst3r 5,681]

Watch Trump take credit for this. "GAS PRICES HAVE NEVER BEEN LOWER"

 

[Economy 52,840]

5 minutes ago, Luc said:

I'm just thinking... no painting, no cars, no flights, little production and little shipping for the next two months in Europe and perhaps one month in China seems realistic. The US is probably the biggest market, but considering they're royally ****ing up, we can expect similar markets. The only way such a decline in demand would not drive down the oil prices even much lower would be if oil producers stop because their employees get infected with the virus. But there's a sort of prisoners' dilemma between Saudi Arabia and Russia in stopping oil production if employees get infected, similar to the Biden vs. Bernie dilemma who would stop rallies first. I'm not going to buy and bet on higher prices, oil prices could go much lower if Saudi Arabia and other Gulf nations manage to contain the virus (don't think Russia is capable of controlling it tbh, their numbers already seem way off), while the oil doesn't get sold because the rest of the world is literally not using any oil.

I mean we're still using it. Ppl are still driving outside shutdown areas and oil based products still being made

 

The #1 biggest drop in demand would be jet fuel followed by just the general slow down

 

But this isn't just demand based... With the Russia-OPEC now deal broken investors are pricing in anticipated increased supply in the market

 

A drop in demand at the same time production surges is terrible for the oil market

 

God help the US Shale industry now. They are even more vulnerable than Canadian Oil companies because of their higher debt load (because of rapid uncontrolled expansion) and their short cycle oil projects which cannot smooth out short term fluctuations

[Economy 52,840]

1 hour ago, Chromatic Lover said:

The Saudis did this in 2014 to push US shale producers out of business. They failed miserably given that the US was able to adopt and produce the shale for cheaper. While the flooding of oil in the markets is due to Russia not meeting the Saudis demands, the US will benefit in the long term as our shale producers will now find a way to produce it for even cheaper. Hate capitalism all you want, but if it's one of the many things the Americans are good at is making money. The benefit though is that gas prices should become cheaper for consumers. However, renewables and other alternatives would suffer as it won't be able to compete with cheap fossil fuels if prices stay too low for too long. 

I doubt this will be the same as 2014

 

More of the 1st tier prime acreage (most productive land) has been used up especially in the 2nd and 3rd largest shale formations (Bakken and Eagle Ford) which means there's less available land that can break even with such low oil prices

 

Debt levels are also higher among US Shale companies now plus investors have become more pessimistic on the industry given their inability to get out of red ink

 

They were already having a hard time getting funding and credit before this crash and this will just make it harder

 

Some large and more efficient companies like Exxon Mobil that have lower debt, more cash reserves and lower average production costs will no doubt survive and pull thru

 

But there's gonna be another big wave in bankruptcies and I suspect this time Shale will get damaged more than in 2014-2015 for the reasons I mentioned mark my words

[migamiga 12,102]

omg where do you guys live?! i thought it was cheap for me when i paid $3/gallon