Looks like next month they will be paying us to take oil off their hands
https://www.cmegroup.com/trading/ene...eet-crude.html
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Looks like next month they will be paying us to take oil off their hands
https://www.cmegroup.com/trading/ene...eet-crude.html
BUYING ALL COMPUTER SCRAP WORKING OR NOT
CHECK OUT MY BUYERS THREAD http://www.scrapmetalforum.com/scrap...nic-scrap.html
https://getjunk.net/Knox-County-TN-0...Recycling.html
Metal Recycling Entrepreneur
No, it will probably drive the price of gas up. If oil producers can't get anybody to buy oil, they will stop pumping. You don't just stop and start with a key switch. We have oil in reserves, which has to get processed. That will burn up fast. So, no crude being pulled, that leaves us with with what we got, we got. A 2-3 day shut down, a 2-3 day start up again. They pull the Stay at Home orders, even at a few states at a time, and reserve will burned up fast.
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Since you are the greatest I can only assume you are correct
Metal Recycling Entrepreneur
It's been claimed we have a 2 month storage, and other countries like China have 6 months. I'm not sure I believe it.
Metal Recycling Entrepreneur
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Originally Posted by IamTheGreatest
This may be true, but what I think is happening is everyones storage reserves are full, and there is nobody buying. So there are companies still pumping out oil from the ground, and no one to buy it and nowhere to store it. The people pumping also have nowhere else to store it. So the companies literally are paying to get rid of it because they have to get rid of it and have no where to store it. They may have since stopped pumping but still have a bunch to get rid of that has already been pumped, is in transit, etc.Thats how it can and did go negative.... from what I heard. I didnt look into it that much. But basically there is so much supply and so little demand, that the may crude barrel price (via futures contracts) went negative, essentially the oil sellers paying companies to store it/take it from them. That wont translate into free gas for consumers (as there is a lot that goes into getting it from crude oil to gasoline and into our gas tanks), but it certainly indicates that gas prices should be headed south, at least into may.
Edit: saw this on another site
"Some futures contracts "settle to cash" which means we determine the price when I bought the contract and the actual real world price on the day of expiration, then one of us pays the other person on the contract the cash difference. Easy.But oil and most commodity contracts actually settle for the actual product. If you don't close out your soybean contract, you get a call from the exchange telling you that your soybeans are waiting for you in Kansas City and what would you like to do with them?!
Same with oil. Tankers are showing up in houston with millions of gallons of oil and somebody needs to take delivery. Nobody can because all the storage facilities are already full. So people are literally paying you over $30 a barrel for you to take possession of oil. Crazy times."
Last edited by kss; 04-20-2020 at 06:33 PM.
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From what I read in the short term gas prices will go lower but in the long term (meaning in a year or two) we may see all time high prices at the pump....hopefully Mr. Greatest knows......highly surprised a person of his stature would bother posting on a scrap forum but it does take all kinds
Metal Recycling Entrepreneur
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Do you guys remember when the covid thing first came out ?
The general reaction was WTF ... it's just the flu. Why are they making such a fuss ?
I think this will be another one of those events. There's no blueprint for what kind of chain reaction this will set in motion but the effects are likely to be far reaching. Everything is interconnected so it's likely that this will reach out and have some impact on the scrap metals market. Higher metals prices seem to go hand in hand with higher energy prices. It stands to reason that very low oil prices would drag down metals prices as well.
The G.O.A.T. was right. You can't just shut down production. It's like a mile long freight train chugging along at 30 miles per hour. Throw on the binders and the whole train will derail because it's got so much momentum behind it. Same/ same on the back end once the train has finally come to a stop. It will take a whole lotta huffing & puffing just to get the train moving again.
That's likely to "toggle" the supply chain. If there's a glut today ... it's likely there will be a shortage tomorrow.
Metal Recycling Entrepreneur
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I was watching the White House press briefing yesterday afternoon. The impression i got from the POTUS was that we could take quite a bit of the excess into our national reserves. He threw out the numbers and explained a couple of different ways in which it could be done.
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Hills gave a great analogy of the supply chain. One example of the inter-dependency of goods and services is the relationship of corn to the demand for oil. Ethanol is a by product of corn and with the lower demand for fuel means less demand for ethanol. Farmers had been stockpiling corn because of low prices. Just as with oil, the grain bins around the country are near full capacity. The big difference is farmers can dump the excess corn in the fields. The individuals hedging with corn futures are not used to taking physical procession of a commodity and will be paying for removal.
The US government could come to the rescue and dump the corn on the international market, a PR move to help feed the world. This creates a show down between the US and Russia similar to the oil glut. China would benefit from this situation. I am glad I am not involved in the international politics because the removal of one small pebble could tumble the entire building (world economy.) Is it possible a farmer in SD could cause a world wide depression?
Give back more to this world than we take.
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