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Oil Could Crash To $10 As World Runs Out Of Storage

Scorpio

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#1
Oil Could Crash To $10 As World Runs Out Of Storage
Irina Slav

The growing supply glut in oil markets could end up filling all storage tanks worldwide, potentially causing prices to drop even further

Global oil storage could overflow in the coming weeks as the coronavirus pandemic has dealt a severe blow to demand while Saudi Arabia has promised to supply 12.3 million bpd—not just in April but also over the next few months.

Reuters reports, citing analysts, that such a development would overwhelm the already troubled oil industry, forcing production shutdowns. Storage facilities—both on land and offshore—are already filling up, the news agency noted, and Saudi Arabia has not yet started to increase its deliveries of crude.

If such a scenario unfolds, some analysts believe oil prices could slide as low as $10 per barrel.

“We believe we have not seen the worst of the price rout yet, as the market will soon come to realize that it may be facing one of the largest supply surpluses in modern oil market history in April,” Reuters quoted Rystad Energy’s head of oil markets, Bjornar Tonhaugen.

Saudi Arabia said yesterday it will maintain oil supply at 12.3 million bpd over the next few months, with exports to rise to a record 10 million bpd from next month, Reuters reported on Wednesday.

Meanwhile, the glut is causing traders to offer their cargos at steep discounts in a desperate effort to find buyers, Reuters also reported. This raises some questions about Saudi Arabia’s ability to sell the excess crude it plans to be producing over the coming months.

“There are no buyers,” an oil trader from the U.S. told Reuters. “Refiners in trouble, exporters in trouble, producers in trouble. This is a disaster with no end in sight.”

“Cargoes are being severely discounted to move as there are little prospects to export and also very few options to store on ship and/or tanks,” another industry source told Reuters.

At the time of writing, Brent crude was trading at less than $28 a barrel, with West Texas Intermediate at $22.78 a barrel.

By Irina Slav for Oilprice.com









Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.



http://www.silverbearcafe.com/private/03.20/$10oil.html
 

Strawboss

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#2
Extract out of ground.
Put back in ground.
Rinse and repeat...

Sounds like the makings of a shovel ready .gov jobs program.

We are gonna need to dig some holes to bury the excess oil in.
 

Scorpio

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#3
not a problem,
we will buy their oil, but only at low prices,

if you take prices higher, we fire up our infrastructure and kick your ass,

if the ME wants to sell us oil at very low prices, it is wise for us to take advantage of it,

suck 'em dry
 

the_shootist

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#5
Gas was still over $2 gal yesterday when I filled up. It seems the gas stations are storing it just fine
 

Fatrat

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#6
Twenty years ago, gas was .99 a gallon, can we dream again of Cadillac's and other land yachts?
 

the_shootist

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#7

Unca Walt

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#8
Twenty years ago, gas was .99 a gallon, can we dream again of Cadillac's and other land yachts?
Oh, dear. Yer spot on, Fatrat -- Twenny years ago, I was driving a new Skidaddlac (they run on high test only). Now I have a Japanese "appliance" Toyota Camry.
 

the_shootist

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#10
Yeah but so would the paychecks of those who work in the industry
 

the_shootist

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#12
greedy bass turd cocksuckers.....gas should be $.49 cents a gallon
Look also at the greedy politicians who add so many taxes to the price of fuel. They rob us blind as well
 

andial

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#13

the_shootist

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#16
...for Super or Sunoco 260! Sunoco 190 was .20centavos back in the day.
I had a Mercury that would only run right on 260...those were the days brother
 

Unca Walt

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#17
Of course, back in those days, Uncle Sam was giving me a $31.00 paycheck EVERY TWO WEEKS!!
 

southfork

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#18
Sams club had rec 90 .35 cheaper than the ethanol crap
 

Scorpio

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#19
here is a list of taxes by state,
so you can go here and compare your state to others,

What is the United States national gas tax rate?
The United States federal excise tax on gasoline is 18.4 cents per gallon (cpg) and 24.4 cents per gallon (cpg) for diesel fuel. On average, as of April 2012, state and local taxes add 31.1 cents to gasoline and 30.2 cents to diesel for a total US average fuel tax of 49.5 cents (cpg) per gallon for gas and 54.6 cents per gallon (cpg) for diesel.

http://www.gaspricewatch.com/web_gas_taxes.php
 

Scorpio

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#21
yep ttaz, here also, low of 1.69 to 2.09, dependent on where you are
 

Scorpio

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#24
OPEC+, G20 Produce A Very Dim Light At The End Of A Long, Dark Oil Price Tunnel



After the OPEC+ countries produced an oil supply reduction agreement on Thursday that amounted to a half-measure at best, industry observers had pinned some hope on a firm commitment to further cuts coming from G20 call that took place on Friday. Those hopes were not fulfilled, as the G20 communique included only vague language indicating those nations would work towards “market stability.”
The language in the comminique reads as follows: “We commit to ensure that the energy sector continues to make a full, effective contribution to overcoming COVID-19 and powering the subsequent global recovery. We commit to work together in the spirit of solidarity on immediate, concrete actions to address these issues in a time of unprecedented international emergency. We commit to take all the necessary and immediate measures to ensure energy market stability.”
In this political season in the U.S., that reads like issue-specific talking points from a candidate trying to say something to placate the public and media without really taking either side of the issue.

Leaving matters even more up in the air, Mexico refused to commit to its full share of the OPEC+ cuts, saying it could only reduce its own production by 100,000 barrels of oil per day (bopd). U.S. President Donald Trump intervened to commit to his country to supporting Mexico’s part of the deal by supplying 250,000 bopd in cuts of its own, but left the process of how he would achieve that level of firm supply reduction unclear. This is a key question since the national U.S. government has very limited power to force firm reductions in production by the private companies that operate all wells in the country.
Canada, which has not been a participant in any previous efforts to control supply, also remained non-committal in terms of committing to any firm reductions of its own.


https://dbdailyupdate.com/index.php...-dark-oil-price-tunnel/?utm_source=whatfinger
 

the_shootist

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#28
Peak Puke Oil
 

andial

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#29

andial

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#31
$4.85 a barrel then correct?
 

andial

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#33
Thanks, Holy shit!
 

nowon

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#34
There is little to no storage' left, cratering near term paper contract. Further out oil futures are holding up anticipating demand from less quarantine.

Dollar store oil prices, wow
 

Cigarlover

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#38
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