TPS Posted April 21, 2020 Posted April 21, 2020 28 minutes ago, jrober38 said: I don't think this is necessarily true. The issue is there's no where left to store oil, and no one has turned off the taps yet. That's just going to keep getting worse. Oil stockpiles are skyrocketing right now, and this is going to last a lot longer than a few months because there's too much oil being drilled right now. Yes, I'm talking about when investors believe it has hit bottom. It will take some time for sure... 1
Magox Posted April 21, 2020 Posted April 21, 2020 5 minutes ago, bbb said: What about the old adage of "being greedy when others are fearful" I don't know which old adage to use! You can still be greedy while investing in it without it dropping precipitously. I don't know where in the oil sector you would plan on investing but there are a considerable amount of them that won't end up surviving. I used to trade a lot of oil for a commodities investment brokerage years back and these sort of drops BBB are unlike anything I have ever seen.
jrober38 Posted April 21, 2020 Posted April 21, 2020 2 minutes ago, TPS said: Yes, I'm talking about when investors believe it has hit bottom. It will take some time for sure... Gotcha. I guess the question is how long can US oil companies go while hemorrhaging money. I imagine that only the biggest companies have the cash reserves to survive a prolonged downturn. The oil and gas service and equipment sector is going to get annihilated.
Foxx Posted April 21, 2020 Posted April 21, 2020 (edited) 2 hours ago, Deranged Rhino said: not sure where the oil consumption levels are currently at with the down turn but before it, it was around 100 million barrels a day. also, before the Russia/Saudi agreement, the world production was in the neighborhood of 95 million barrels a day. this will certainly help for maybe a month, 2 tops. Edited April 21, 2020 by Foxx 1
bbb Posted April 21, 2020 Posted April 21, 2020 54 minutes ago, Magox said: You can still be greedy while investing in it without it dropping precipitously. I don't know where in the oil sector you would plan on investing but there are a considerable amount of them that won't end up surviving. I used to trade a lot of oil for a commodities investment brokerage years back and these sort of drops BBB are unlike anything I have ever seen. I was just joking. It seems like every old adage has an opposite old adage. 1
TPS Posted April 21, 2020 Posted April 21, 2020 3 hours ago, Foxx said: this was posted Friday the 17th at forexlive: There are some strange things going on in oil as ETF flows skew the market additionally, Goldman sacs said the following: Given the difficulty and costs of storing oil (even in normal times), investors typically never keep positions into expiration. The size of the long positions in May WTI had therefore already shrunk significantly as all the major commodity indices and ETFs rolled earlier this month into the June contract. Illustrating that point, the unprecedented collapse in May WTI prices occurred with only 100k contracts trading today, a tenth of the June contract volumes. In terms of holders, the surge in retail interest in recent weeks -- as illustrated by the USO ETF which now represents 30% of the June WTI contract open interest -- suggests that retail positions (in outright WTI contracts rather than systematically rolling products) were likely still long May WTI contracts into this week and now forced sellers (consistent with the sell-off accelerating in the 30 minutes ahead of the close and the sharp rebound that followed). regardless, we shall see in the days ahead. I found that Goldman quote on Zero Hedge. Maybe I wasn't paying attention, have they made it easy for anyone to trade futures now? One used to have to pass the Series 3 exam. Can individuals trade futures through their brokers who have the Series 3? That would be stupid, but not surprising as Wall Street needs the rubes....
jrober38 Posted April 21, 2020 Posted April 21, 2020 7 minutes ago, TPS said: I found that Goldman quote on Zero Hedge. Maybe I wasn't paying attention, have they made it easy for anyone to trade futures now? One used to have to pass the Series 3 exam. Can individuals trade futures through their brokers who have the Series 3? That would be stupid, but not surprising as Wall Street needs the rubes.... I feel like I've heard numerous futures trading guides or get rich quick schemes on Sirius Talk Radio over the last few years, with the warning at the end, "Trading in Futures represents considerable risk. Trade at your own risk."
TPS Posted April 21, 2020 Posted April 21, 2020 2 hours ago, keepthefaith said: I sold my USO yesterday, thank you very much. Appreciate your expertise. I didn't own much and had bought it cheap so minimal pain. ? I went on Yahoo a few minutes ago to look at comments about USO. You will find two types of people hyping it: those who hold short positions, and those who have no clue what they're buying. USO's price has been rising while the underlying June contract is falling. The power of social media... By next week, it will be dissolved.
Foxx Posted April 21, 2020 Posted April 21, 2020 (edited) 30 minutes ago, TPS said: I found that Goldman quote on Zero Hedge. Maybe I wasn't paying attention, have they made it easy for anyone to trade futures now? One used to have to pass the Series 3 exam. Can individuals trade futures through their brokers who have the Series 3? That would be stupid, but not surprising as Wall Street needs the rubes.... reports are beginning to emerge. Op-ed: Recovering from this unprecedented oil crash could take years and may not benefit Saudi or Russian producers ... The cost of storing physical crude, the enormous gap between supply and demand and other disruptions to the market led to this historic rout. One of them was only lightly touched upon and some other issues are emerging this morning as the collateral damage being done is in the early stages of being tallied. Yesterday, the Financial Times reported that a Singaporean trader hid some $800 million in losses from oil trades gone sour. His counterparties include HSBC, Société Générale and ABN Amro. On Tuesday, there are reports that South Korean investors have recently loaded up in structured notes tied to the price of crude and are likely suffering large losses as the result of yesterday’s historic crash. Add to that, the likelihood of additional, and large, losses among hedge funds, domestic holders of leveraged oil exchange-traded funds, highly levered oil producers and a coming wave of bankruptcies among those same companies and the damage done to oil markets is far from over. ETF marketers are already suggesting they may, or will, halt trading in them or possibly liquidate them, causing a further cascade in the price of oil. ... it's AXIOS but i found this to be telling... The aftermath of oil's march into the unknown ...The big picture: The historic price collapse reflects two things at the same time. 1. More narrowly, it was about the calendar as the expiration of the May futures contract looms today. Speculative traders and companies were rushing to unload contracts for May delivery, but with the oil unwanted, they had to start paying to get rid of them. "[W]ith adequate storage in Cushing [Oklahoma] unavailable to those who need it, selling intensified in the May futures contract," Wood Mackenzie analyst Ann-Louise Hittle said in a note. "This issue is most intense for May WTI because oil demand is at its weakest." ... Edited April 21, 2020 by Foxx 2
jrober38 Posted April 21, 2020 Posted April 21, 2020 (edited) 3 minutes ago, TPS said: I went on Yahoo a few minutes ago to look at comments about USO. You will find two types of people hyping it: those who hold short positions, and those who have no clue what they're buying. USO's price has been rising while the underlying June contract is falling. The power of social media... By next week, it will be dissolved. Looking at future oil futures contracts, I think it's conceivable that oil companies might be selling their product for steep losses until at least July, and possibly well into the fall. It's hard to imagine anyone but the big boys surviving this. The small operations are all going to get wiped out. Edited April 21, 2020 by jrober38
TPS Posted April 21, 2020 Posted April 21, 2020 4 minutes ago, Foxx said: Add to that, the likelihood of additional, and large, losses among hedge funds, domestic holders of leveraged oil exchange-traded funds, highly levered oil producers and a coming wave of bankruptcies among those same companies and the damage done to oil markets is far from over. ETF marketers are already suggesting they may, or will, halt trading in them or possibly liquidate them, causing a further cascade in the price of oil. ... Yes, this is what I'm focused on. Bye-bye USO.... 1 1
Foxx Posted April 21, 2020 Posted April 21, 2020 https://twitter.com/russian_market/status/1252576864612356096 3
B-Man Posted April 21, 2020 Posted April 21, 2020 LATEST LIBERAL IDEA: TAX THE RICH! by Steven Hayward You won’t believe it. The newest liberal idea for funding coronavirus relief, as explained in the New York Times this morning, is—wait for it now!—a wealth tax on the rich! Since we’re not supposed to be touching our faces right now, you’re not allowed to smack your forehead and exclaim, “Why didn’t I think of that!? Why is it that liberals have all of the best new old ideas?” Here’s the heart of the proposal from Yale professor Daniel Markovits: The wealthiest 5 percent of American families now hold $57 trillion, or two-thirds of all household wealth in the country (up from about half in 1960). An exemption for the first $2.5 million of household wealth would exclude the bottom 95 percent from paying any tax at all and leave the top 5 percent with total taxable wealth of roughly $40 trillion. A 5 percent tax on the richest 5 percent of households could thus raise up to $2 trillion. Since Markovits is a law professor, the first question of my cross-examination will be: “So why do you want to help out the big banks?” Because there are lots of small business people in this country who have (or had) ill-liquid assets worth more than $2.5 million who will have to take out bank loans to pay their one-time 5% wealth tax. Great business for Goldman Sachs and J.P. Morgan Chase. And more debt to service is just what the small business sector of the economy needs right now. Second question for Prof. Markovits: “I note that Yale has (or had) an endowment of $30 billion. Will your wealth tax apply to Yale’s endowment as well?. . . Ah—I thought not.” By the end of this week, I predict we’ll see the sequel in the Times or The Atlantic: “With oil prices so low, this is the ideal time for [wait for it now!]‚—a carbon tax!” This seems like the ideal time to counter with the sage axiom of my mentor M. Stanton Evans: “Any country that can land a man on the moon can abolish the income tax.” There—fixed it for them. . 3
TPS Posted April 21, 2020 Posted April 21, 2020 The volume in the June contract is insane today, 1.7 million. If USO holds about 30% of the contracts, they could be in the process of liquidating. I've had trouble accessing the USO website too. Interesting... 1 1
Foxx Posted April 21, 2020 Posted April 21, 2020 https://twitter.com/BoogieCrypto/status/1252317798308642819 4
3rdnlng Posted April 21, 2020 Posted April 21, 2020 1 hour ago, Foxx said: https://twitter.com/BoogieCrypto/status/1252317798308642819 Don't let them fool you, those are the La Brea Tar Pits. 2
Foxx Posted April 23, 2020 Posted April 23, 2020 Oil could soon fall to -$100 per barrel: Energy analyst ... Crude prices could go negative again as 40 million barrels of Saudi oil are currently on route to the U.S. The shipment was agreed upon in March before much of the economy came to a grinding halt amid COVID-19. “Those barrels take 45 to 60 days to arrive. And we can see this a flotilla of tankers that are coming towards the U.S. market ... We really can't handle it at all.”... from the hot link in the above quote: Saudi Arabia may re-route tankers if U.S. imposes crude import ban, sources say LONDON/NEW YORK/MOSCOW (Reuters) - Saudi Arabia is exploring re-routing millions of barrels of oil onboard tankers sailing to the United States if President Donald Trump decides to block imports of crude from the kingdom, shipping and trade sources say. Some 40 million barrels of Saudi oil are on their way to the United States and due to arrive in the coming weeks, piling more pressure on markets already struggling to absorb a glut of stocks, according to shipping data and sources. U.S. officials have said in recent days that Washington is considering blocking Saudi shipments of crude oil, or putting tariffs on those shipments, adding to difficulties for the cargoes now on the water. ... ... U.S. Senator Ted Cruz, from the oil-producing state of Texas, said on Twitter on Tuesday: “My message to the Saudis: TURN THE TANKERS THE HELL AROUND.” ... 3
ALF Posted April 23, 2020 Posted April 23, 2020 Mitch’s itchy palm: The Senate majority leader wants blue states to go bankrupt while Kentucky relies on federal largesse Mitch McConnell, the most powerful man in the U.S. Senate, is kindly suggesting New York and other places throttled by the coronavirus and associated economic shutdowns swallow the fiscal cyanide of bankruptcy, rather than get federal aid, what his staff calls a “Blue State Bailout.” No, the feds shouldn’t prop up rickety pension systems and otherwise unsustainable state spending habits. But the nightmare New York — which, ahem, annually sends $30 billion-plus more to Washington than it gets back — is living through has nothing to do with that and everything to do with the spread of COVID-19. We speak of Kentucky, where in a recent fiscal year, 39.5% of the state’s overall budget came from Washington, making it the fourth most DC-dependent state in the nation. By another measure, Kentucky is the nation’s second most federally dependent state. Kentucky, which has pocketed loads of federal transportation aid, a fact that of course has nothing to do with the fact that McConnell’s wife runs the federal Department of Transportation. https://www.nydailynews.com/opinion/ny-edit-mitchs-itchy-palm-20200423-xefai32pszahxna5v64dwhmwyu-story.html
3rdnlng Posted April 23, 2020 Posted April 23, 2020 1 hour ago, ALF said: Mitch’s itchy palm: The Senate majority leader wants blue states to go bankrupt while Kentucky relies on federal largesse Mitch McConnell, the most powerful man in the U.S. Senate, is kindly suggesting New York and other places throttled by the coronavirus and associated economic shutdowns swallow the fiscal cyanide of bankruptcy, rather than get federal aid, what his staff calls a “Blue State Bailout.” No, the feds shouldn’t prop up rickety pension systems and otherwise unsustainable state spending habits. But the nightmare New York — which, ahem, annually sends $30 billion-plus more to Washington than it gets back — is living through has nothing to do with that and everything to do with the spread of COVID-19. We speak of Kentucky, where in a recent fiscal year, 39.5% of the state’s overall budget came from Washington, making it the fourth most DC-dependent state in the nation. By another measure, Kentucky is the nation’s second most federally dependent state. Kentucky, which has pocketed loads of federal transportation aid, a fact that of course has nothing to do with the fact that McConnell’s wife runs the federal Department of Transportation. https://www.nydailynews.com/opinion/ny-edit-mitchs-itchy-palm-20200423-xefai32pszahxna5v64dwhmwyu-story.html Always suspect motives when one entity is judged by a specific amount of money while another entity is judged by a percentage of money. 1
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