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It's been discussed a lot today in the papers, so I'd imagine you have a better idea of it now.
But basically, if you're left holding May WTI contracts on expiry you are obliged to physically take the oil. But no one can as there's no space and no logistics to move it.
Hence the scramble to sell the position before expiry, but no buyers = negative price to take the oil away.
The new front month, June WTI lost 44% today down to 11.50$, so the process may repeat itself in 4 weeks time.
Brent has different delivery conditions so is harder to go negative, but anything is possible these days!!
Jesus, 'cos he can perform miracles.
It's kind of amazing that on a -7.60% day the rampers are having a party.
For each extra ULCC (that's 2 million barrels-ish) that fills up every day at the moment, the owner of the oil will be selling forward - July, or August most likely. And that process will continue for some time.
Expect some kind of up blip when Trump says his Saudi pal has offered to pull a couple of cargoes off the market, in return for some cheap F22 planes.
Make that 43.5%.
In one day.....
July 21. 50
Aug 24.75
Sep 26.50
Oct 27.75
Nov 28.80
Dec 29.80
Summer 2021, is at 33.50.
Sobering numbers. June / July contango becoming huge again, but this time there won't be any VLCC/ULCC's left to take the excess.
I thought the new CEO was meant to make this an 'up' day?
Gotta admire the ability to turn a -9% down day into a positive.
If oil went back up to $60 and the FTSE was at 7500, then yeah maybe.
Will those 2 things happen this year?
No f&()ing way.
All sparsely populated areas are better protected from COVID. Like Norway for example. But even they have Oslo, like Sweden has Stockholm.
And the US, has Miami, LA, SF, CHicago, etc. etc. etc. etc.
Slift, a better comparison would be to liken Singapore (5 mill) to a big city like Paris (3 mill) or London (8 mill).
I totally agree too. I hate lockdown and think it is totally overdone and overblown, especially in Spain where I live.
But the governments all seem to think otherwise so that's what we get, like it or not.
As for USA low density population, yes, they have huge areas where no one lives, but they also have massive cities where people are squeezed in like sardines.
And as before, in Singapore, they take it very seriously, and yet still have 1500 new cases today. What do you think sis going to happen in the US?
Exactly what I feared.
As long as COVID is still around, countries are prone to see new spikes in infection, and new lockdowns. And Singapore knows how to deal with a virus too, unlike UK or USA.
This really ain't over yet.......
Gasoline is at 62c/gallon, or approx 15c/litre which makes it cheaper than cheap mineral water, and they give you a free plastic bottle with that too.
Amazing.
The crude has to be found, extracted, shipped to a refinery, distilled, blended, taken to the petrol station.
Spain, Italy and France have been hit so hard, they are only going to unlock VERY slowly.
But what happens if numbers start to spike up again?
To my mind, there is a big chance of that happening, as COVID will still be very present in all these countries and it is obviously highly transmissible. And that's before you start thinking of flying people around the world again.
France, Italy and Spain are all still quite a way off removing lockdown.
All 3 still have many thousands of new cases per day, and many hundreds of deaths.
You missed the big one; USA. It's a **** show.
Look, crude is highly volatile right now, it's gonna be bouncing all over the place.
But the key take away here is, IT'S WEAK.
That is not going to go away overnight.
Talking oil here, not TULLOW.
I think the V recovery is a distant dream for most now.
Brent June is correct, just below 20 now.
But WTI June is 15.
Maybe you looking at July WTI?
No it isn't.
For goodness sake, what are you looking at?!
Xel, I don't know enough about the company to say one way or the other.
In my experience, the stuff that makes company's fail is the stuffyou don't hear about until it's too late.
But they are partially hedged which helps.