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OIL SHOCK! Spot WTI goes to Negative

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OIL SHOCK!  Spot WTI goes to Negative

(DrBubb): I hijacked this thread, to show that the "unthinkable" can happen

WTI- Cushing Spot contract went negative, but not the other months, & not Brent Oil

 

Here's USO. the US Oil etf > owns a strip of Oil Futures... Update: 12 mo - to 4/21

xx

Just a few days ago, market observers were looking for an Oil Price Low

Crude Getting Ready for a Rude Move Up? Listen to the podcast here:

https://www.spreaker.com/user/appeal2/nick-santiago-13

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misleading headlines here - since this is a quirky Cushing spot price thing

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OIL PRICE LOWEST IN HISTORY
PLUNGES 70% IN DAY

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"Negative Oil"

If you can buy the cheap Oil and STORE it until you use it, great. 

Otherwise you will have to sell into a steep contango market, and that can be painful as the contract you own approaches maturity, as those who OWNED IT & had to sell today discovered

xx

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Globe says Baytex, others seen as most vulnerable

2020-03-27 07:33 ET - In the News

Also In the News (C-BNP) Bonavista Energy Corp
Also In the News (C-DEE) Delphi Energy Corp (2)
Also In the News (C-POU) Paramount Resources Ltd (2)

The Globe and Mail reports in its Friday edition that access to credit is crucial to the energy industry's survival in the time of COVID-19. The Globe's Jeffrey Jones writes that industry officials have suggested ways to help banks and other lenders to energy companies offer leniency on debt terms. At stake are thousands of jobs in exploration and production as well as oil field services. Bond-rating agencies emphasized the trouble in reports on Thursday, saying the credit situation will likely worsen. In a report this week titled A Breach in the Levee? Bank of Nova Scotia weighed the risks of exploration and production firms breaching debt covenants should crude prices remain depressed this year and next. Small- and mid-size oil producers such as Baytex Energy, Bonavista Petroleum, Delphi Energy and Paramount Resources are the most vulnerable. The reasons vary -- from exposure to depressed heavy oil prices to approaching debt maturities to worsening debt-to-cash flow ratios. Among the best positioned for the times are Advantage Oil & Gas, ARC Resources, Birchcliff Energy, PrairieSky Royalty and Tourmaline Oil -- companies where output is more natural gas than oil, or which provide lands for other producers.

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19 hours ago, drbubb said:

"Negative Oil"

If you can buy the cheap Oil and STORE it until you use it, great. 

Otherwise you will have to sell into a steep contango market, and that can be painful as the contract you own approaches maturity, as those who OWNED IT & had to sell today discovered

xx

I’m sat thinking oil has to turn but when there is so little demand, the Saudi’s, Russians and U.S reaping what they have sowed, June contracts not likely to fare any better than May expired ones due to storage capacity constraints, why would it?

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Oil shares may be a buy before Oil futures

Because Oil prices are supply & demand driven, and oil shares can go up with a shift in sentiment

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The oil ‘futures market worked to perfection,’ says head of world’s largest exchange of crude’s historic plunge to $0 MarketWatch

Duffy explained, during a CNBC interview on Wednesday, that despite the historic descent for West Texas Intermediate crude for the now-defunct May contract US:CL to settle at an unprecedented level at negative $37.623 two days ago, a broken market wasn’t to blame.

Nobody should have been “under the perception that it can’t go below zero,” said the head of the world’s largest exchange platform by market capitalization. The Chicago-based CME Group’s market value is about $64 billion compared with nearly $50 billion for the New York Stock Exchange owner Intercontinental Exchange Inc. US:ICE.

Individual investors, sometimes referred to as oil tourists, piled into exchange traded products, including United States Oil Fund LP US:USO in recent weeks, but were slammed on Monday as crude futures collapsed to levels never before witnessed, amid a glut of oil and few places to store the asset.

Check out: Retail investors are getting ‘hosed’ with the biggest oil ETF down more than 30% this week

The stunning subzero drop for oil prompted Continental Resources Inc. US:CLR founder Harold Hamm to file a complaint with the CME and write a letter to the Commodity Futures Trading Commission asking for a probe into “potential market manipulation, failed systems or computer programming failures,” Reuters reported.

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There seems a lot of sour grapes from gamblers around.

Just guesswork on my part but are we not going to see these Oil ETF’s in more trouble as June contracts expire; as to my novice eye on these matters, it looks like more of the same is possible.

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HE "GETS IT" !

"This was about storage costs... People who got caught here, were those who got cute & did not roll over"

Oil Prices Collapse But Should You Invest - Marin Katusa April Commodities Report

Oil Prices Collapse But Should You Invest - Marin Katusa April Commodities Report Well the oil price has collapsed below zero. Who better to explain the current situation to use than legendary resources investor Marin Katusa. We discuss why the oil markets have collapsed, why there are different prices of oil, how the futures contracts, ETFs & stocks will be affected by the current oversupply & drop in demand. All commodities will be impacted in this global economic slowdown. But many oil companies are carrying high debt levels & bonds they've issued could be downgraded to junk status in the coming weeks, collapsing the corporate bond market. This could start a cascade affect leading to a wider stock market crash & global economic recession.

===

His Tips: Pipeline & infrastructure cos spun-off from Oil majors

BP to Spin off US Pipeline Assets MLP in IPO - CFO - CFO.com

 
Sep 11, 2017 - Following the example of other oil companies, BP is spinning off pipeline assets in an initial public offering it expects will raise up to $100 ...
 

Midstream Spinoffs Aren't for Everyone

Integrated oil and gas has seen some success in spinning off its midstream and refining operations. But for Occidental, it just doesn't make sense.

Feb. 8th, 2013 /  Despite production volume records and beating analyst expectations for five straight quarters, Occidental Petroleum (NYSE:OXY) sure hasn't seen a lot of love lately from investors. With so many other companies in the integrated oil and gas space making big moves to spin off their midstream and refining operations, perhaps investors are waiting for a similar shakeup to unlock shareholder value.

 

Marathon Petroleum to spin off Speedway; CEO to retire ...

 
Oct 31, 2019 - Marathon Petroleum Corp. will spin off its Speedway stores into a ... industry-leading companies well-positioned for long-term growth and ...
 

EQT Corporation is spinning off its midstream pipeline business

 
Feb 21, 2018 - EQT, the nation's biggest natural gas producer, will spin off its pipeline ... Rice Energy last year and will merge the two companies' midstream businesses. ... businesses — which transport oil and gas from wells to processing, ...

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A Record Fleet Of 117 Tankers Is Bringing Super Cheap Crude To China

2020-05-15_oryb6lo4xj.jpg?itok=AV24Erd6

While the rest of the world is tentatively coming out of lockdowns, China is taking advantage of the cheapest crude oil in years to stock up...

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