The Lemon Fool

US Crude futures for May delivery below $6 now!

LOL


GS

Which is less than 1p per litre. Fill your boots ! ( in the apparent absence of an alternative)

And yet Shell (RDSB) shares are actually up today.

I think in the end for delivery tomorrow the price went negative in the USA because of a storage shortage.

johnhemming wrote:I think in the end for delivery tomorrow the price went negative in the USA because of a storage shortage.

Wow, minus $40 on some contracts at the close. Amazing!

https://www.bloomberg.com/news/articles ... orage-woes

GS

Laughton wrote:And yet Shell (RDSB) shares are actually up today.

Maybe because yesterday it was being reported they were chartering a fleet of low carbon oil tankers - and today some are paying $333K/day to rent the tanks on oil tankers to store oil, or where they are paying others to collect 'free' oil.

GoSeigen wrote:US Crude futures for May delivery below $6 now!

LOL


GS

GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp

This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.

johnhemming wrote:This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.

Never let a good fact spoil the narrative.

johnhemming wrote:This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.

When oil is produced it cannot be replaced and new oil must be found. This why high cost shale came into existence.

It's dangerous territory unless you know exactly what you're doing. The majority of ordinary punters are jumping into ETCs such as Wisdomtree's CRUD that they think will allow them to simply ride the rising tide when prices rise again. But that's a disaster in waiting, because most of them have no idea about how contango works. Or the rolled-forward exposure.

https://seekingalpha.com/article/259740 ... king-error is as good a guide as any. And it also explains why my Brent ETCs (OILB) only made a 25% profit when the oil price was damn near doubling.

The bottom line is that the funds are constantly obliged to roll their contracts forward if they don't want to be saddled with a physical delivery of a million barrels of crude. (And who would? It will make an awful mess of the basement. ) So they end up being forced to buy the new contracts at much higher prices, and to sell their current contracts for peanuts, and the fund takes the hits, all the way.

Or something like that.....

I've been dabbling in commodities for the best part of 30 years, and done fairly well, but the more I learn, the more I discover I don't understand. I don't think I've ever encountered a sector where the inside track is so well informed as it is with oil. There is no Ben Graham moment here, I fear! Although I might still be tempted by a couple of oil producers, who are at least partially insulated from the weird logic of the ETC world. The divis from RDS have done me proud over the years, but I sold at 2,300p and I'm still looking for a time to be back in.

BJ

The frac spread count is already below the trough from 2016.
https://twitter.com/PrimaryVision/statu ... 6051345413

I was going to buy some oil stocks but it was reported that BRENT will be dragged down by WTI
fall so I am postponing this for the time being.

dspp wrote:
GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp

That's pretty funny dspp! I think chutzpah is the word.

GS

That's reasonable, but there is a timescale question.

GoSeigen wrote:

dspp wrote:
GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp

That's pretty funny dspp! I think chutzpah is the word.

GS

GS,

It is possible

More seriously renewables are taking a slice out of the demand, year by year. There is a reason why ROPEC+USA are having a bust up internally about who gets to ship their oil reserves over the next few decades before they become devalued. It is hard to remain king for life, for a long life, if the contents of your treasury are stolen or devalued.

These things are connected. The deep drivers are long term, overlaid of course by the short term noise.

Regards, dspp

It could be faster. It depends really on to what extent people start flying again.

Bio jet fuel takes a lot of fertiliser to grow which comes substantially from fossil fuels.

I don't know what people use as biojet fuel, but you can get things like rapeseed oil which can power heat engines.

You would probably have to process the original source biofuel quite a bit (thereby losing energy efficiency) to get to the right sort of chemical source for jet fuel.