General Oil crash thread

[Splinty]

So Russia says they aren't backing off.
This hits Texas and Canada Shale.
Saudi wakes up today and says 'hold my beer' or something...with a 30% cut in price
Coronavirus decreases travel demands...

The result...

Did Saudi protect itself? Or is that Saudi giving Russia an FU from the USA? Yes this hits Texas shale a lot, but the US economy can eat the hit. Russian is much more reliant on oil exports.

 

[member 3289]

So Trump authorized the release of COVID-19 by a CIA operative in Wuhan?

 

[Splinty]

So Trump authorized the release of COVID-19 by a CIA operative in Wuhan?

Correct. Bioengineered from HIV to attack those without neanderthal DNA. It is lying dormant waiting for 5G activation. The end goal, Chinese style martial law, end of social security, forced mass vaccinations, Bill Gates installing microsoft into your head. Early death. FEMA work camps. FROGS TURNING FRICKIN GAY.

 

[sparkuri]

Correct. Bioengineered from HIV to attack those without neanderthal DNA. It is lying dormant waiting for 5G activation. The end goal, Chinese style martial law, end of social security, forced mass vaccinations, Bill Gates installing microsoft into your head. Early death. FEMA work camps. FROGS TURNING FRICKIN GAY.

I knew it.

But it was Obama.

Thx Obama

 

[Robbie Hart]

The price will go up

Cartel will agree to cut production, they always do......There will be a point where they say “fack off non-cartel people and enjoy the price rises you numptys”

 

[member 3289]

Correct. Bioengineered from HIV to attack those without neanderthal DNA. It is lying dormant waiting for 5G activation. The end goal, Chinese style martial law, end of social security, forced mass vaccinations, Bill Gates installing microsoft into your head. Early death. FEMA work camps. FROGS TURNING FRICKIN GAY.

It would be a very effective move. Inherently evil but undoubtedly effective.

Also it would be nice to analyze relationship between crude oil and gasoline prices. It seems like when the price of oil drops gasoline prices drop but only slowly, whereas when the price of oil rises gasoline prices rise immediately and more proportionally in comparison.

 

[Splinty]

Cartel will agree to cut production, they always do......There will be a point where they say “fack off non-cartel people and enjoy the price rises you numptys”

Yeah EVENTUALLY, but that's exactly the opposite of what caused this. Russia refused to cut production so Saudis reminded them who had the cheaper oil. Russia will have to break and the USA and Canada will have to arrange a deal with Saudi to back off in a way that doesn't help Russia who started this.

In the mean time, futures show 30 bucks a barrel for the next two quarters. Investors think this is a 6+ month hit. That's HUGE down here in Texas

 

[Freeloading Rusty]

Yeah EVENTUALLY, but that's exactly the opposite of what caused this. Russia refused to cut production so Saudis reminded them who had the cheaper oil. Russia will have to break and the USA and Canada will have to arrange a deal with Saudi to back off in a way that doesn't help Russia who started this.

In the mean time, futures show 30 bucks a barrel for the next two quarters. Investors think this is a 6+ month hit. That's HUGE down here in Texas

30$ barrels? So do we see a drop at the pumps?

 

[Splinty]

30$ barrels? So do we see a drop at the pumps?

eventually

As he said:

Also it would be nice to analyze relationship between crude oil and gasoline prices. It seems like when the price of oil drops gasoline prices drop but only slowly, whereas when the price of oil rises gasoline prices rise immediately and more proportionally in comparison.

It assume its future contracts and USA forced demand that do this. You've got product in the pipeline and limited refining capacity to get to all that cheap stuff. So price is up for a little. No one want to lower their gas price and you can't at first anyways. US consumer doesn't/can't price shop or gas abstain.
Price goes back up and there is probably some smart business calculus about the lack of elasticity in USA oil demand and everyone chases back up to the max selling point pretty fast.

 

[Splinty]

Ruh roh

Dow futures tumble 1,200 points, Treasury yields plunge amid oil price war

Killing treasury safe Haven's during corona fears

 

[Splinty]

Theoretically cheap gas == American consumers spend on other stuff, but down here I've never seen that be the economic picture. Oil crash means job losses and the ripple down from that is bigger than the freed up capital

 

[member 3289]

Crypto currencies are also in a freefall

 

[1372]

No fucking idea what any of this means but

 

[1372]

Theoretically cheap gas == American consumers spend on other stuff, but down here I've never seen that be the economic picture. Oil crash means job losses and the ripple down from that is bigger than the freed up capital

@ShatsBassoon is moving down this way.

I love the Canuck accent...Yeah...But...Right...Glorious

 

[Rambo John J]

Crypto currencies are also in a freefall

metals will hold

 

[Papi Chingon]

Can't wait for $2/gallon gas! I've been itching to drive my car like I stole it on a consistent basis.

 

[BrunoMcGyver]

Can't wait for $2/gallon gas! I've been itching to drive my car like I stole it on a consistent basis.

Yeh man. I came a bee's dick to storming out of my desk job and doing Uber Eats full-time, then I realise I drive an SUV now so probably a shit idea

 

[Papi Chingon]

Yeh man. I came a bee's dick to storming out of my desk job and doing Uber Eats full-time, then I realise I drive an SUV now so probably a shit idea

I bought a v8 sportscar in November and driving it like a homosexual gets me about 16 miles per gallon, so I really need to calculate when I should mash the gas pedal since that brings me down to around 8mpg.

 

[HEATH VON DOOM]

If that's the case then fuck the Wuhan flu, I am going on a cross country road trip. I may even drive to Austin and piss on @Splinty front yard

 

[Hauler]

30$ barrels? So do we see a drop at the pumps?

Yes.
Also a good buying opportunity in the market.

But overall it isn't good news. If production is cut it can have a huge trickle down effect that isn't pretty.

 

[Sheepdog]

Yeah EVENTUALLY, but that's exactly the opposite of what caused this. Russia refused to cut production so Saudis reminded them who had the cheaper oil. Russia will have to break and the USA and Canada will have to arrange a deal with Saudi to back off in a way that doesn't help Russia who started this.

In the mean time, futures show 30 bucks a barrel for the next two quarters. Investors think this is a 6+ month hit. That's HUGE down here in Texas

I think the Saudis might be underestimating the hit Russia is willing to take to land some blows of its own. I'm not saying Russia won't blink but I've seen some pretty dumb analysis comparing this situation to 2014 as if it's exactly equivalent.

It's the Saudis who are in a bind. Their military protector is their energy enemy. They might have a big weapon against Russia but they are also turning it on themselves and their ally too. The Russians have a much simpler calculation - how much are we willing to endure to try and knock out the US shale industry and damage the finance that keeps it alive while hurting the US-Saudi alliance at the same time? That calcultion is the same as it was in 2014.

But this isn't 2014. The entire system of capital that props up the US shale industry is on shaky legs and it had already grown tired of keeping shale on life support. And this isn't simply about oil economics - Russia would realize how much potential damage could be done to the wider US economy under these circumstances and would thus be more willing to endure damage to their own.

Previously it was Russia's entire shaky economy vs a single industry propped up by a strong economy. Now it's shaky economy vs shaky economy. That changes the calculus.

 

[Splinty]

Previously it was Russia's entire shaky economy vs a single industry propped up by a strong economy. Now it's shaky economy vs shaky economy. That changes the calculus.

Yeah I'm seeing the exposure in stock and futures this am. Looks like credit driven buy backs are now dead in the water. There could be a 30-40% stock hit on this aspect alone for larger s&p 500 that has been focused on this for the last 2 years with big buybacks keeping you stock prices.

 

[Splinty]

metals will hold

Normally yes. But there's a credit crunch occuring in some sectors so it's getting beat up instead of the usual East safe haven.

Gold Slides Below $1,700 as Investors Look Everywhere for Cash

We are gonna go negative interest rates like Europe if this keeps up.

 

[ShatsBassoon]

@ShatsBassoon is moving down this way.

I love the Canuck accent...Yeah...But...Right...Glorious

Bank of canada lowered interest rates so Canadians can rack up more debt.

In the short term it'll be good for my business and hopefully we wont lose our shirts when we go to sell our house.

 

[FINGERS]

Normally yes. But there's a credit crunch occuring in some sectors so it's getting beat up instead of the usual East safe haven.

Gold Slides Below $1,700 as Investors Look Everywhere for Cash

We are gonna go negative interest rates like Europe if this keeps up.

Europe has negative interest rates?