negative oil price
- Thread starter flykiller
- Start date
GypsyComet
SOC-14 1K
Since Traveller's various mercantile systems don't dabble in the arcane and dangerous art of commodity futures, no.
That's not to say crews can't lose their shirts, though.
That's not to say crews can't lose their shirts, though.
Condottiere
SOC-14 5K
You don't need a shirt in a climate controlled environment.
RainOfSteel
SOC-14 1K
Too bad they won't be paying us to fill up on gas, at least at the moment, with gasoline futures being separate from West Texas Intermediate futures.
Timerover51
SOC-14 5K
Gas at the CostCo near me in Wisconsin is $0.999 Cents a gallon. A low price in Illinois is $1.77 per gallon. The Costco is 8.6 miles away. A round trip takes less than a gallon of gas. Guess where I am buying gas. With the hike in the Illinois Gas Tax, along with the Metro tax, and sales tax, there is a solid floor for Illinois gas as well. Wisconsin gas tax revenues benefit.
The problem is storage capacity. With the massive drop in demand, I have seen figures of 30%, refineries are selling less, so their storage tanks are full, and that backs up the chain. Trump has announced renewed buys for the Strategic Petroleum Reserve, as right now, prices are incredibly cheap, but that will help keep the oil industry from borderline collapse.
The problem is storage capacity. With the massive drop in demand, I have seen figures of 30%, refineries are selling less, so their storage tanks are full, and that backs up the chain. Trump has announced renewed buys for the Strategic Petroleum Reserve, as right now, prices are incredibly cheap, but that will help keep the oil industry from borderline collapse.
Xerxeskingofking
SOC-13
petrol prices here in the UK have been very low as well. for reference, the prince in January at my preffered petrol station was £1.19 a litre ( 1ltr= .026 US gallons, or 3.78 ltr to 1 US Gallon). running the conversions, it was about £4.50 a gallon, about $5.80 at January exchange rates.
as of yesterday (the last time I saw it), the price was £1.05 a litre (~$4.80 a gallon at current exchange rates), which is the lowest I can remember it being, and the lowest I have seen it in the time I have been driving (10 years)
HMG statistics say motor vehicle use is down to about 20-30% of pre lockdown levels, and almost all other forms of public transport (bus, train, London underground, etc) are down to less then 10% of pre lockdown levels. A large percentage of that motor vehicle use is "service" and logistical traffic like lorries, and private car useage is fairly low as well.
now, fuel duty and sales tax (VAT) make up about ~70p of that price, and are fixed, but still, its really low.
the UK, like most of Europe, doesn't get its oil form the US, but the Mid East, and the news relating to the oil prices here is mostly focused on a trade war between the russains and Saudi arabia, with a glut of production form them forcing prices down here, in conjuction with the reduced demand. I don't know how much coverage that aspect gets in the US
as of yesterday (the last time I saw it), the price was £1.05 a litre (~$4.80 a gallon at current exchange rates), which is the lowest I can remember it being, and the lowest I have seen it in the time I have been driving (10 years)
HMG statistics say motor vehicle use is down to about 20-30% of pre lockdown levels, and almost all other forms of public transport (bus, train, London underground, etc) are down to less then 10% of pre lockdown levels. A large percentage of that motor vehicle use is "service" and logistical traffic like lorries, and private car useage is fairly low as well.
now, fuel duty and sales tax (VAT) make up about ~70p of that price, and are fixed, but still, its really low.
the UK, like most of Europe, doesn't get its oil form the US, but the Mid East, and the news relating to the oil prices here is mostly focused on a trade war between the russains and Saudi arabia, with a glut of production form them forcing prices down here, in conjuction with the reduced demand. I don't know how much coverage that aspect gets in the US
mike wightman
SOC-14 10K
Nope, it's entirely the result of the futures traders gambling and losing.
Condottiere
SOC-14 5K
As I understand it, physical delivery dates were due, and unlike milk, you can't dump oil on the ground or in the river, so you have to bribe someone else to take it off your hands if you can't find storage space, or at least, at an affordable rate.
This is temporary; if I were the Chinese, I'd just build more storage, and buy everything available, which solves somewhat two of their problems.
I would think the pressure on coal would be greater.
This is temporary; if I were the Chinese, I'd just build more storage, and buy everything available, which solves somewhat two of their problems.
I would think the pressure on coal would be greater.
mike wightman
SOC-14 10K
Coal is much easier to store - you just dump it in a huge mound.
Oil needs storage tanks and pumps.
Oil needs storage tanks and pumps.
G. Kashkanun Anderson
SOC-13
It is covered, but here it's seen more as a 'strange bedfellows' situation than as a trade war. Or maybe like the Three Stooges fighting over an oil tap. Both the Saudis and the Russians were attempting to use the same weapon to blow up the US shale oil industry, I suppose so that they can unload as much of their oil at a decent price over the next decade before stagnating demand renders it into a stranded asset. At least, that was the Saudis plan, I think; I am not sure the Russians are economically sophisticated enough to work it out that far into the future. But they're happy enough with any plan which sticks it to the Americans, regardless of the long term consequences.
Plus, the US has been tossing economic hand grenades at the Russia-to-Germany Nord Stream pipeline while aggressively pushing dirt cheap natural gas into the European market. The Europeans, for a variety of political and economic reasons, are more than happy to allow big boatloads of dirt cheap American gas float up to their docks, but the Russians are naturally having kittens over it. But as sending wolfpacks out into the North Atlantic to hunt down US flagged LNG tankers is out of the question, taking a poison pill to their own economy on the off chance that it also shuts down the Bakken Shale for a couple of years is apparently viewed as their next best option.
G. Kashkanun Anderson
SOC-13
You can dump oil in the ground if you have to -- and, in fact, that is exactly what the US government is planning to do. The Strategic Petroleum Reserve is a vast collection of underground storage sites in the Southern US, with a capacity of just under 800 million barrels of crude oil. Currently, the reserve stands at about 635 million barrels, leaving just over 160 million barrels of spare capacity.
Just the other day the US announced plans to purchase about 75 million barrels of oil to add to the Reserve, essentially saying that they were buying a bunch of oil for the sole purpose of putting it back into the ground.
You know, for a rainy day.
Not at the moment, but long term, yes. Coal is under a strong, steady decline (at least in North America), but it is not in absolute collapse, like oil. But at the rate coal power plants are being decommissioned or retrofitted to natural gas facilities, it only has a few more decades at most as a viable industry in North America. In some regions (like where I live), it won't even survive the decade as a fuel source.
But, at least for now, you don't have to pay anyone for the privilege of taking it off your hands.
mike wightman
SOC-14 10K
Considering China is in the process of building 400 new coal fired power stations the future of coal is safe for a while yet.
But currently, the demand for coal at spot rates is steady since the bulk of it is for power generation (and we sure still need power), and maybe some folks who still burn it for heat.
We used to have a coal stove -- it was an awful, filthy thing. But better awful and filthy than cold.
Oil, however, with folks not driving and planes not hauling anything, has taken a hit. (There are still oil fueled power plants.)
richard gorman
SOC-8
...and for those of us who don't drive...
Aye but how does that affect the price of lanthanum? Err...hydrogen. Maybe not. Is there anything the Imperium could run out of? Toilet paper? Imperial Stationery Design toilet paper? Unobtanium?
Aye but how does that affect the price of lanthanum? Err...hydrogen. Maybe not. Is there anything the Imperium could run out of? Toilet paper? Imperial Stationery Design toilet paper? Unobtanium?
GypsyComet
SOC-14 1K
It probably doesn't. With enough worlds and advanced surveying and mining techniques available, even a rare earth like lanthanum isn't really "rare" anymore. It is also probably highly recyclable from ship to ship, assuming no catastrophic loss. As a "durable" commodity it does not suffer the same issues as expendable feedstocks like petroleum hydrocarbons. The only time it *might* be locally scarce is during large scale wars, when your fleet just vanished two sectors away so you can't recycle, your best local sources are under siege, and the foundry was bombed to oblivion last week...
In local pockets, probably. Looking at the big picture, though, means natural resources and processed goods always have enough sources.
Timerover51
SOC-14 5K
That is fairly meaningless, as unless they can unload, which is not a given, the oil will not enter the U.S. Market. As for the tanker going to California, unless is has the proper type of oil onboard, California cannot refine it. Right now, there is pretty much no land storage space for that oil, so the tankers are just going to sit there, along with the three that are already sitting off the Gulf Coast, without unloading.
Zerohedge, at times, is given to sensationalism. This is one of them. As it is, if they actually did unload, even with the U.S. reduced consumption, 50 million barrels would only be about 3 or 4 days of U.S. consumption, and about 4 days of U.S. production.
mike wightman
SOC-14 10K
They could also be empty as it is the Saudis who have been paid to take the oil.
