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Old 20th April 2020, 01:10 PM   #561
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Originally Posted by Mid View Post
I may be wrong but I think Brent is still well in the positive due to storage capacity at least according to the FT:

https://markets.ft.com/data/commodities

Although I'll admit my understanding of the various bits of the oil market is next to zero so I may well be reading the market data wrong
Here is a twitter thread that explains things:

https://twitter.com/gilbeaq/status/1252293724215762950

May contracts are just about to expire. Anyone can buy and sell futures... but if your left holding onto them when they expire guess what, you get paid in oil. No suppliers or refineries want it at the moment, speculators never actually want to take physical possession. So it went bellow zero.
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Old 20th April 2020, 03:32 PM   #562
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Originally Posted by Mid View Post
oh -$20 a barrel that's so 15 minutes or so ago it's now hit -$40.32:

https://www.ft.com/content/a5292644-...8-ace55d766654

ETA although Brent crude is still at a heady +$25
Okay, I'm having some serious dumb. How can the price be negative? Are they paying us to take barrels off their hands?
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Old 20th April 2020, 04:49 PM   #563
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Originally Posted by Emily's Cat View Post
Okay, I'm having some serious dumb. How can the price be negative? Are they paying us to take barrels off their hands?
Think of it as though you rented a storage unit and your lease expired. You are happy to leave what you thought were valuables there, but the owner prosecutes you for the cost of destroying them.
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Old 20th April 2020, 04:51 PM   #564
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Wall street might turn ugly tonight, it appears the shorts have been squeezed dry on low volume.
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Old 20th April 2020, 05:42 PM   #565
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Originally Posted by Samson View Post
Wall street might turn ugly tonight, it appears the shorts have been squeezed dry on low volume.
Trying hard not to, with futures up a touch - 50-odd points.

Could be just idiots throwing good money after bad.

I see Virgin Australia has thrown the towel in - they will not be the last. The airline industry has been over-leveraged for decades on the promise of ever-growing travel.

Oops.
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Old 20th April 2020, 07:19 PM   #566
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As for oil, I suggest those that drill it up the expensive stuff, think fracking, go out of business. Then the oil price goes up, because the economies are improving. What is stored is used. That will not last. Anyone who generates electricity using wind or solar would then be laughing and can sell their product for a good price. So they build even more solar and wind farms.
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Old 20th April 2020, 08:04 PM   #567
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Originally Posted by blutoski View Post
My wife's an MD, so her account manager / investment advisor is calling weekly. I'm guessing some of his clients are freaking out. Not us, we're like you.

Also: gold bugs have been knocking door to door here, trying to sell us their worthless mine stocks.

Yes. Our advisor called us early on trying to convince us not to make any rash moves. I cut him off mid sentence, ďDude...we arenít making a move. Chill.Ē The rest of the conversation was spent chit chatting about the kids, how much we miss Vegas...
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Old 20th April 2020, 08:44 PM   #568
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Originally Posted by Samson View Post
Wall street might turn ugly tonight, it appears the shorts have been squeezed dry on low volume.
I see futures are now down 200, so you might well be right.

Had to happen - blind faith will only hold for so long, and I can't see it dropping due to Kim Jung Un's lack of health.
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Old 20th April 2020, 09:37 PM   #569
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Originally Posted by lobosrul5 View Post
So, crude oil is now trading at $1.50 a barrel. Thats what about 3.5 cents a gallon! Lowest price before today in inflation adjusted dollars, since WW2 was around $17 a barrel!!!

Too bad there doesn't seem to be a good way for an ordinary person to invest in crude. The ETF USO is just a money loser long term.

ETA: now 80 cents a barrel!

ETA2: lol negative $20 something a barrel now.

I donít know how to translate this news. I will gladly take $20 something dollars a barrel to simply turn around, rent a warehouse and hold like 100 barrels until the price gets back to around $50 a barrel. I can get my hands on a big enough warehouse at a cheap rent for a few months with a few phone calls. Something tells me this is just a fantasy and not the way it really works.
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Old 20th April 2020, 09:45 PM   #570
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Originally Posted by xjx388 View Post
I donít know how to translate this news. I will gladly take $20 something dollars a barrel to simply turn around, rent a warehouse and hold like 100 barrels until the price gets back to around $50 a barrel. I can get my hands on a big enough warehouse at a cheap rent for a few months with a few phone calls. Something tells me this is just a fantasy and not the way it really works.

After reading some other posts...I think I can swing the transportation for 1000 barrels of oil from OK to So. TX. My BiL is the dispatcher for an oil companyís fleet. So I will take the 20k, turn around and pay my BiL 10k to mobilize the delivery and rent the warehouse space for under $1000 a month... I still donít think this reflects the reality of the situation.
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Old 20th April 2020, 11:50 PM   #571
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Originally Posted by xjx388 View Post
I donít know how to translate this news. I will gladly take $20 something dollars a barrel to simply turn around, rent a warehouse and hold like 100 barrels until the price gets back to around $50 a barrel. I can get my hands on a big enough warehouse at a cheap rent for a few months with a few phone calls. Something tells me this is just a fantasy and not the way it really works.
Trouble is you need huge tanks to store oil. Anything small is just not worth it. Remember bottled water in less than one litre bottles is more expensive than petrel. Exact prices may vary by region. Then you need to ensure the whole thing does not literally burn down.

You could buy a petrol station that has recently closed and buy the petrol to fill the tanks. Then when the price goes back up sell the petrol to the public, then the station. Even that might not be worth it.
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Old 21st April 2020, 03:10 AM   #572
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Originally Posted by rjh01 View Post
Trouble is you need huge tanks to store oil. Anything small is just not worth it. Remember bottled water in less than one litre bottles is more expensive than petrel. Exact prices may vary by region. Then you need to ensure the whole thing does not literally burn down.

You could buy a petrol station that has recently closed and buy the petrol to fill the tanks. Then when the price goes back up sell the petrol to the public, then the station. Even that might not be worth it.
This isn't petrol, though, it's crude oil.
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Old 21st April 2020, 03:24 AM   #573
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Originally Posted by The Atheist View Post
I see futures are now down 200, so you might well be right.

Had to happen - blind faith will only hold for so long, and I can't see it dropping due to Kim Jung Un's lack of health.
A little cryptic on NK, but the V shape recovery is a bizarre absurdity.
It will look obvious soon.
Whatever letter of the alphabet fits the chart
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Old 21st April 2020, 07:52 AM   #574
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May contract price is going way up for WTI today, its positive! But the June contract price for both Brent and WTI is getting killed.

Originally Posted by rjh01 View Post
Trouble is you need huge tanks to store oil. Anything small is just not worth it. Remember bottled water in less than one litre bottles is more expensive than petrel. Exact prices may vary by region. Then you need to ensure the whole thing does not literally burn down.

You could buy a petrol station that has recently closed and buy the petrol to fill the tanks. Then when the price goes back up sell the petrol to the public, then the station. Even that might not be worth it.
Petrol/Gasoline doesn't last forever though. About 6 months until it starts to degrade, even less if its an ethanol blend. So you'd have to sit there with your money tied up in a station, paying property taxes and wait it out until hopefully you can sell at a profit. Probably not going to pay off.

FYI: I paid $1.19 per US GL this morning.

Last edited by lobosrul5; 21st April 2020 at 07:54 AM.
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Old 21st April 2020, 07:57 AM   #575
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Originally Posted by rjh01 View Post
Trouble is you need huge tanks to store oil. Anything small is just not worth it. Remember bottled water in less than one litre bottles is more expensive than petrel. Exact prices may vary by region. Then you need to ensure the whole thing does not literally burn down.

You could buy a petrol station that has recently closed and buy the petrol to fill the tanks. Then when the price goes back up sell the petrol to the public, then the station. Even that might not be worth it.

But these are 42.7 gallon barrels of crude. Surely they can be stored in a warehouse? This would be a $20k+ profit deal on a thousand barrels. All for just moving them somewhere else.

There must be something Iím not considering. Like maybe you canít actually store barrels of oil. Or they donít give you literal barrels. Something stupid and basic about the business that I donít know about and an oilman would say, ďPardner, yer a few cards short of a full deck, ainít ya?Ē
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Old 21st April 2020, 08:02 AM   #576
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Originally Posted by xjx388 View Post
But these are 42.7 gallon barrels of crude. Surely they can be stored in a warehouse? This would be a $20k+ profit deal on a thousand barrels. All for just moving them somewhere else.

There must be something Iím not considering. Like maybe you canít actually store barrels of oil. Or they donít give you literal barrels. Something stupid and basic about the business that I donít know about and an oilman would say, ďPardner, yer a few cards short of a full deck, ainít ya?Ē

ETA: What Iím trying to do is figure out how this makes sense. It seems to me that there have to be some oilmen out there who see this as a huge opportunity with little downside. But it seems in the real world, nobody is actually doing something like what I suggest so I must be missing something fundamental.
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Old 21st April 2020, 08:02 AM   #577
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Originally Posted by xjx388 View Post
But these are 42.7 gallon barrels of crude. Surely they can be stored in a warehouse? This would be a $20k+ profit deal on a thousand barrels. All for just moving them somewhere else.

There must be something I’m not considering. Like maybe you can’t actually store barrels of oil. Or they don’t give you literal barrels. Something stupid and basic about the business that I don’t know about and an oilman would say, “Pardner, yer a few cards short of a full deck, ain’t ya?”
They don't give you literal barrels. Its just a unit of measurement. You show up with a tanker truck, or train car, and they use a hose to fill it up. Storing it? Well you need the facility and that costs money to build, get regulatory approval, inspections, and maintenance (I knew a guy that used to scrub the tanks, paid super well but horrible job).

My guess is anyone with capacity that "bought" at negative prices will eventually make a killing.

Last edited by lobosrul5; 21st April 2020 at 08:21 AM.
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Old 21st April 2020, 08:12 AM   #578
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Originally Posted by xjx388 View Post
ETA: What Iím trying to do is figure out how this makes sense. It seems to me that there have to be some oilmen out there who see this as a huge opportunity with little downside. But it seems in the real world, nobody is actually doing something like what I suggest so I must be missing something fundamental.
I'm guessing that storing oil contains a whole bunch of environmental and safety regulations. It's not just building a tank and pouring it in.

And you can't just throw oil away, or burn it, so people really have to get it off their hands.

At least, that's the only thing I can figure out why there would be a negative price, ever.
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Old 21st April 2020, 08:23 AM   #579
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Originally Posted by xjx388 View Post
But these are 42.7 gallon barrels of crude. Surely they can be stored in a warehouse? This would be a $20k+ profit deal on a thousand barrels. All for just moving them somewhere else.

There must be something Iím not considering. Like maybe you canít actually store barrels of oil. Or they donít give you literal barrels. Something stupid and basic about the business that I donít know about and an oilman would say, ďPardner, yer a few cards short of a full deck, ainít ya?Ē
I don't think oil has been put in physical 42.7 gallon barrels since long before James Dean was involved in the oil trade. It would be incredibly inefficient.
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Old 21st April 2020, 11:56 AM   #580
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Originally Posted by rjh01 View Post
Trouble is you need huge tanks to store oil.
What???

You mean all those empty school swimming pools I just booked are no good?

Originally Posted by Samson View Post
A little cryptic on NK, but the V shape recovery is a bizarre absurdity.
It will look obvious soon.
Whatever letter of the alphabet fits the chart
V-shaped recovery my backside.

I called it the biggest dead cat bounce in history and I'm bloody sure it will be proven to be just that.

If we were through Covid, it might even have a touch of solidity to it, but when you're only 5% of the way through, people talking recovery are either insane or wilfully self-deluded.

Maybe the buyers are all christians?
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Old 21st April 2020, 12:00 PM   #581
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Originally Posted by Guybrush Threepwood View Post
I don't think oil has been put in physical 42.7 gallon barrels since long before James Dean was involved in the oil trade. It would be incredibly inefficient.

That explains why the homeless have so many rusty metal barrels to start fires in...

I know there are reasons why my idea is not feasible, I just didnít know what they were. Thanks all!
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Old 21st April 2020, 01:35 PM   #582
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Originally Posted by The Atheist View Post
What???

You mean all those empty school swimming pools I just booked are no good?



V-shaped recovery my backside.

I called it the biggest dead cat bounce in history and I'm bloody sure it will be proven to be just that.

If we were through Covid, it might even have a touch of solidity to it, but when you're only 5% of the way through, people talking recovery are either insane or wilfully self-deluded.

Maybe the buyers are all christians?
The Lt Governor of the 2nd largest US state has said that the economy is more important than living. So.... insane? I dunno.

https://thehill.com/homenews/state-w...portant-things
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Old 21st April 2020, 01:41 PM   #583
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Originally Posted by lobosrul5 View Post
The Lt Governor of the 2nd largest US state has said that the economy is more important than living. So.... insane? I dunno.
Yeah, I saw that story and was yet again reminded of King Farquaad: "Some of you may die, but that's a risk I'm willing to take.", because you can bet your life the Lt Gov will make sure he doesn't catch it in his mansion.

Smart response from the Texas DNC Chair, I thought:

Quote:
"They would see our family members die to bail out Wall Street," Hinojosa said. "The lives of our families, our friends, and our communities have no dollar amount. Texas Republicans can no longer claim to be the pro-life party anymore.Ē
Yep, no irony at all in people who would ban abortions saying this stuff.
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Old 21st April 2020, 02:07 PM   #584
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Originally Posted by The Atheist View Post
I called it the biggest dead cat bounce in history and I'm bloody sure it will be proven to be just that.
Certainly not proven less than 24 hours later, but with June oil trading at $12 and the Dow solidly down 600 and still going, the cat looks rather like it's starting to smell already.
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Old 21st April 2020, 04:47 PM   #585
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Perspective: barring accidents or another unexpected event, New Zealand will be one of the financially least-impacted countries by Covid.

Yes, tourism will be savaged, but will be offset by about 50% by Kiwis taking internal holidays instead of external, and our food sector will be the saviour, to the absolute chagrin of the loony left and Greenmunists.

Yet, the most-conservative bank has come with projections showing NZ's unemployment to hit 14% and house prices to crash by 10-15%: https://www.stuff.co.nz/business/121...es-down-15-anz

I think 10-15% is a very optimistic scenario, and ANZ touches on it by noting that credit might be a problem. And it's going to be - an extra 200,000 unemployed, the majority of which have mortgages, means that there will be mortgagee sales and I think 25% is within sight. Rents likewise.

(Funny story I heard last Friday - a real estate agent made two sales over $1,000,000 during the lockdown, bought sight unseen. I hope their mortgages weren't too steep!)

Seems to me countries like USA and most of the EU will be more heavily impacted than us, and with far worse debt/GDP ratios than ours, will create some very trying economic circumstances for a wee while.
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Old 21st April 2020, 11:01 PM   #586
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How can a trailing price-earnings multiple of 19.6 times Ė against an historical average of less than 16 times Ė be reconciled with the inevitable collapse in US corporate earnings in the June quarter and beyond?
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Old 21st April 2020, 11:02 PM   #587
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Ok that's not really me saying that.
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Old 22nd April 2020, 12:13 AM   #588
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Originally Posted by The Atheist View Post
Yet, the most-conservative bank has come with projections showing NZ's unemployment to hit 14% and house prices to crash by 10-15%: https://www.stuff.co.nz/business/121...es-down-15-anz

I think 10-15% is a very optimistic scenario, and ANZ touches on it by noting that credit might be a problem. And it's going to be - an extra 200,000 unemployed, the majority of which have mortgages, means that there will be mortgagee sales and I think 25% is within sight.
Sounds like good news for buyers who have the money.

Apparently NZ house prices have been skyrocketing recently.

Auckland & NZ hit record median prices before COVID-19 hit
Quote:
Median house prices across New Zealand increased by 13.7% in March to a new record median price of $665,000, up from $585,000 in March 2019 and eight regions saw new record median prices, according to the latest data from the Real Estate Institute of New Zealand (REINZ)
So perhaps a 'correction' was in the cards anyway.
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Old 22nd April 2020, 12:18 AM   #589
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Originally Posted by Roger Ramjets View Post
Sounds like good news for buyers who have the money.

Apparently NZ house prices have been skyrocketing recently.

Auckland & NZ hit record median prices before COVID-19 hit

So perhaps a 'correction' was in the cards anyway.
Very tricky in these parts.
One Roof says a pause then off to the races.

https://www.oneroof.co.nz/news/ashle...iTyYT46U0zNE30
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Old 22nd April 2020, 01:22 PM   #590
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Originally Posted by a_unique_person View Post
How can a trailing price-earnings multiple of 19.6 times Ė against an historical average of less than 16 times Ė be reconciled with the inevitable collapse in US corporate earnings in the June quarter and beyond?
People making predictions about what shape profits will be in post-Covid are kidding themselves.

Except Netflix.

Originally Posted by Roger Ramjets View Post
Sounds like good news for buyers who have the money.

Apparently NZ house prices have been skyrocketing recently.
Make that for the last 15 years instead of recently and you'd be right, so a correction is long overdue.

I just hope it turns out that way.

Originally Posted by Samson View Post
Very tricky in these parts.
One Roof says a pause then off to the races.
Nah, talking their book is my guess. The Herald, like all newspapers, is getting crushed by Covid and they're trying to drive a little interest.

The disappearance of tourists, re-establishing AirBNBs as permanent rentals, the number and scope of developments under way, the re-purposing of commercial space as residential, and the total collapse of those bloody student visas will ensure there's a glut on the supply side.

The number of mortgagee sales and 200,000 extra unemployed aren't going to fire the housing market up soon. There will be some anomalies, though - Queenstown, which had absurd prices & rents, will utterly crash, while places like Tauranga may escape the worst of it.
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Old 23rd April 2020, 06:25 PM   #591
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Major reversal in the Dow. I saw it up a couple of hundred, but it finished the day only up 40 and then down 120 on futures.

Bloomberg seems to think it's tied to Remdesivir having an uncomplimentary non-study released, and if something like that manages to impact the entire market, it's proof people are living in hope.
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Interesting statistic out of NZ regarding the economy & housing - 47,000 students on work/study visas have left the country since the lockdown began.

Given that most of them will have left Auckland, and housing was 30,000 beds short in the city, it suggests the virus has fixed that problem in one hit.
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Old 28th April 2020, 07:04 AM   #592
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Meow.
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Old 28th April 2020, 10:12 AM   #593
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Originally Posted by Meadmaker View Post
Meow.
Haha! Life in the cat yet, ya reckon?

For some reason, I'm reminded of this:

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I AGREE
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Old 28th April 2020, 10:24 AM   #594
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Originally Posted by The Atheist View Post
Haha! Life in the cat yet, ya reckon?

For some reason, I'm reminded of this:

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I think so, although there is great uncertainty ahead.

I'm not nearly as gloomy on the prospects as I was a month ago.
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Old 28th April 2020, 10:26 AM   #595
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Originally Posted by Samson View Post
Wall street might turn ugly tonight, it appears the shorts have been squeezed dry on low volume.
Did Wall Street end up turning ugly that night?
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Old 28th April 2020, 10:36 AM   #596
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Originally Posted by The Atheist View Post
Yeah, I saw that story and was yet again reminded of King Farquaad: "Some of you may die, but that's a risk I'm willing to take.", because you can bet your life the Lt Gov will make sure he doesn't catch it in his mansion.
It's a house, not a bio-dome. Family, friends, staff - people are going to be in and out of there all the time, mingling with each other and mingling with the rest of the world.

The image of a lieutenant governor living in a secure compound is more appropriate to the bygone era of British imperialism. American politicians tend to just live in larger versions of the same houses as everyone else, in fancier neighborhoods with bigger yards.
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Old 28th April 2020, 11:46 AM   #597
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Originally Posted by Emily's Cat View Post
Okay, I'm having some serious dumb. How can the price be negative? Are they paying us to take barrels off their hands?
Basically, yes. The problem is that *nobody* has any place to store the oil. And with the economic downturn, nobody is using the stuff in quantity. So you have an over supply and almost zero demand. The market then does what it does and lowers price until demand catches up. The other problem is that this was at the end of the contract. So you have to take delivery soon. A time crunch added to the mess.
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Old 29th April 2020, 08:16 AM   #598
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Originally Posted by xjx388 View Post
But these are 42.7 gallon barrels of crude. Surely they can be stored in a warehouse? This would be a $20k+ profit deal on a thousand barrels. All for just moving them somewhere else.

There must be something I’m not considering. Like maybe you can’t actually store barrels of oil. Or they don’t give you literal barrels. Something stupid and basic about the business that I don’t know about and an oilman would say, “Pardner, yer a few cards short of a full deck, ain’t ya?”
A "barrel" is just the unit of volume that's used in the trade. and the 42.7 gallons isn't even a size of "barrel" that's made any more. It is based on a wooden barrel that was used in the 19th century, when the oil industry was just starting out. The most common "barrel" (actually a steel drum) currently in use is 55 U.S gallons, but the vast majority of crude oil and refined products never sees the inside of any kind of barrel. It is stored in tanks, and transported by pipeline, railroad tank car or tank truck. So, in theory, you could rent a warehouse, buy some 55 gal. drums, hire people to fill the drums, put them in your warehouse, and, when you're ready to sell, hire people to pump the drums into tank trucks or tank cars, and sell it. I doubt there would be much (or any) profit in it by the time you figure in the labor costs to do that, even assuming that you manage it without having a large spill or a fire.

Last edited by CORed; 29th April 2020 at 08:23 AM.
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Old 29th April 2020, 11:58 AM   #599
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Wow, if you ever needed to know the cat is in fact dead and now starting to rot, but being hidden by people living in ga-ga land, today is it.

On one hand, reports show the US economy shrinking by 5% this quarter, and on the other, Gilead released a report that showed Remdesivir works the same for a five day dose as 10 days. Not a word on its efficacy, just that half the dose is as good as a whole course.

Market goes up...
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Old 30th April 2020, 02:14 PM   #600
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Someone please kick that cat to see if it's still alive?

As the economic reality starts to sink into even the most optimistic and deluded brains, the Dow finishes the month 350 down and another 150 on futures already.
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