The other headline: The Oil Glut of 2020

"davesaddiction @ opposite-lock.com" (davesaddiction) 04/20/2020 at 01:59 • Filed to: None

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Mrs. addiction and I still have jobs (today).

We’ll see what tomorrow brings.

Merfthemadmauler > davesaddiction @ opposite-lock.com 04/20/2020 at 02:33

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Since March 23 I’ve driven my vehicle 5 times,twice 6 miles to medical procedures, twice 2 miles for groceries and once for emission testing. I don’t know what gas is at the pump,  because I haven’t bought any.

pip bip - choose Corrour > Merfthemadmauler 04/20/2020 at 05:11

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go for a long drive, take some food and drink with you, if pulled over just tell them you’re doing it for your mental health.

food and drink will help convince them that you are keeping ti the social distancing requirements

Rusty Vandura - www.tinyurl.com/keepoppo > davesaddiction @ opposite-lock.com 04/20/2020 at 07:49

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Good morning! Do you even fold ?

I need to see how much my Tesla remaining stock is worth.

I attended a church meeting on Zoom yesterday afternoon with my wife and I am much surprised at how impactful it was. I’ve been in a cocoon these four weeks.

I hope you and yours are well.

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 08:04

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I remember when oil was $14.99. The good old days.

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 08:06

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A lot of this is the May contract coming off. We’ll see a bump on Tues night. Maybe to $15 again lol *cries in offshore*

It’s the 10 yea r anniversary of Macondo (9:56 PM CDT ) , so happy Monday I guess. :(

someassemblyrequired > davesaddiction @ opposite-lock.com 04/20/2020 at 08:10

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Western Canadian Select went negative last night apparently.   As in they pay you to take it.

HoustonRunner > davesaddiction @ opposite-lock.com 04/20/2020 at 08:29

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My wife and I are both in the industry as well. Her company (midstream) is doing a first round of layoffs May 1. My company (business consulting) is ok for now, and I have a billable project through 15-May.

Good luck.

Gone > someassemblyrequired 04/20/2020 at 08:30

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Yeah, some US is as well - Wyoming Asphalt Sour for one . The thing is WTI is kind of a misnomer, it’s not a wellhead price so no one was getting anything close to that. Wellhead prices are lower and bound to be negative in a lot of places right now.

Manwich - now Keto-Friendly > davesaddiction @ opposite-lock.com 04/20/2020 at 08:56

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I just checked and oil is now dow to the $11 range, which on an inflation adjusted basis, is probably an All-time low... lower than oil prices back in the 1950s and 1960s

50ford500 > davesaddiction @ opposite-lock.com 04/20/2020 at 08:58

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So now or sometime in the reasonably near future may be good times to invest in it. 

Jarrett - [BRZ Boi] > Merfthemadmauler 04/20/2020 at 09:39

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I’m in the same boat. I drove 20kms to get a frappachino at a drive- thr u  just so the car doesn’t rot away.

Been working from home since mid-march.

davesaddiction @ opposite-lock.com > Merfthemadmauler 04/20/2020 at 10:34

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Yep... 

davesaddiction @ opposite-lock.com > someassemblyrequired 04/20/2020 at 10:35

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Crazy. 

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 10:36

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Got down to 11 for May deliveries before going back to 20+ for June. 

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 10:37

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Yeah, thankfully it bumped this morning for the June contract, but wonder how low it might settle in the next month. 

davesaddiction @ opposite-lock.com > Manwich - now Keto-Friendly 04/20/2020 at 10:39

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It’s crazy. On our group call right now and our CEO said it’s the first time we’ll be shutting in wells because of price in the 45 years he’s been in the business. That low was for May contracts - June is still above $20. We’ll see if that starts dropping soon...

davesaddiction @ opposite-lock.com > Rusty Vandura - www.tinyurl.com/keepoppo 04/20/2020 at 10:41

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No folding for me.

TSLA looks like it’s on its way back up. Not sure why with oil prices as low as they are, but Telsa buyers aren’t exactly value buyers anyway. 

MasterMario - Keeper of the V8s > Merfthemadmauler 04/20/2020 at 10:42

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It’s really nice though isn’t it? Wasting gas and time just driving to and from work. 

davesaddiction @ opposite-lock.com > HoustonRunner 04/20/2020 at 10:42

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Thanks - same to you all. Hope she makes it through the layoff, and that your savings are healthy and your debt is low. Going to be a rough ride (already has been these last couple years, and then the bottom dropped out). 

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 10:44

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Crazy. That’s for May contracts; June is back above $20. 

HoustonRunner > davesaddiction @ opposite-lock.com 04/20/2020 at 10:45

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Thanks. I think we are prepared to weather the figurative storm, hoping we don’t have to.

What part of the industry are you in?

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 10:46

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I have a feeling it might settle in the teens? Hard to tell because the market has been irrational (surprise) . Between the twittering, the Fed, and filling up of storage it could land anywhere. Personally I’m very pessimistic.

Should have mentioned it ear lier, but h oping y’all come out okay. G ood luck.

davesaddiction @ opposite-lock.com > 50ford500 04/20/2020 at 10:53

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If you’re willing to hold for the long term, yes. 

Manwich - now Keto-Friendly > davesaddiction @ opposite-lock.com 04/20/2020 at 10:55

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In Alberta, one work program for laid off oil workers they started is to fix previously closed/abandoned oil/gas wells that are having issues with leaks or other issues.

And I also heard in the US that they’re looking at to pay companies to leave the oil in the ground.  I think that might be tied to an oil supply reduction agreement done with OPEC+.

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 10:59

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Thanks - back at you.

I’m personally an optimist, but thankfully we generally handle our finances like pessimists, and have been incredibly fortunate the past 15 years . Some Depression-era tendencies were definitely handed down from my parent’s parents. I’m happy to say w e’re debt-free and have healthy savings.

davesaddiction @ opposite-lock.com > HoustonRunner 04/20/2020 at 11:07

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We’re pretty much in the same boat. We both work for producers - she’s at a mid-size public company (reserves manager) and I’m at a small private (software & mapping support). Thankfully both of our companies have decent hedges through the end of the year... 

Was just on a group call and our CEO said it was the first time in his 45 years that we’re going to be shutting in wells because of low prices. 

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 11:23

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My normal optimism is sty mied by the whole oil demand crash.

That’s good on y’all . Plenty of people in the industry aren’t good with money, which is weird considering... I f not for a mortgage and a truck payment we’d be free of debt, but at least we’re far from being underwater on either of those . Also f ortunately I never got around to selling my old truck, so I can swap back to it i f need be . We’re fine if one of us keeps working., but  b oth of us getting cut would be a bit uncomfortable .

Rusty Vandura - www.tinyurl.com/keepoppo > davesaddiction @ opposite-lock.com 04/20/2020 at 11:32

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I think the Tesla must be a poor value, honestly. Batteries that wear out, body panels and seats that wear out. And pricey.

Is the folding just something you don’t want to fool with? I’m just curious, not trying to pressure you about it.

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 12:24

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Yeah, we’re fine in the short to medium term, but if both of us lose our jobs, and opportunities don’t come back for... years?... I just don’t know how we’d each restart in a different industry, if necessary,  at this point.

davesaddiction @ opposite-lock.com > Rusty Vandura - www.tinyurl.com/keepoppo 04/20/2020 at 12:35

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It’s a green luxury item/status symbol.

They have to stay in “vogue” to succeed, and tastes change. We’ll see.

Not really, thanks. 

50ford500 > davesaddiction @ opposite-lock.com 04/20/2020 at 12:42

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Yeah that is my line of thinking as well. A sizable Chunk of money at or near current pricing will likely be a good long term investment. It’s not going anywhere and it will eventually come up so I can see the potential 

davesaddiction @ opposite-lock.com > HoustonRunner 04/20/2020 at 13:46

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Freefall... May contracts below $2.50. 

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 13:46

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Freefall... May contracts below $2.50.

$1.28 a minute later...

RallyWrench > davesaddiction @ opposite-lock.com 04/20/2020 at 13:47

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Every time I read about oil prices, I think of you and the other Oppos in the oil biz. Glad you and Mrs. Addiction are still working, hope it stays that way.

davesaddiction @ opposite-lock.com > RallyWrench 04/20/2020 at 13:53

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Thanks, I appreciate it. I hope so, too! I think it w ill be a miracle if we’re both employed by this time next year, though...

davesaddiction @ opposite-lock.com > RallyWrench 04/20/2020 at 14:07

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As you know, low oil prices are one of the worst things for the future of EVs, globally. Maybe many governments and individuals will be moved by the clear skies they’re witnessing these past few weeks, but in the end, people usually make the decisions that are best for their pocketbooks (and families). 

RallyWrench > davesaddiction @ opposite-lock.com 04/20/2020 at 14:18

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This is true. I’ve been thinking that perhaps the vast improvement in air quality, and time people are spending simply walking or riding bikes, will help us understand our effects on the world and our own health. I’m not optimistic given how badly people are behaving otherwise, but just a thought. The pocketbook is the bottom line. To really do EV ownership properly is a big investment that not a lot of people are able to make, for now. The EV shift is ultimately going to be bad for this business too, they simply don’t need the work and are ever more tethered to their manufacturers. 

RallyWrench > davesaddiction @ opposite-lock.com 04/20/2020 at 14:19

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Hoping the best for you, and that there are other opportunities for you to pursue if needed. 

davesaddiction @ opposite-lock.com > RallyWrench 04/20/2020 at 14:22

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We’ll be okay, but man, it will be weird if I have to restart after 15+ years. 

davesaddiction @ opposite-lock.com > RallyWrench 04/20/2020 at 14:25

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It will be interesting if more companies are more open to workers telecommuting after this forced experiment in remote working. If a quarter of all commuters start working from home, that will make a big dent. 

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 14:45

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Neat.

davesaddiction @ opposite-lock.com > Gone 04/20/2020 at 14:53

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That’s what zero demand looks like.

A friend said “storage is now the commodity”. 

davesaddiction @ opposite-lock.com > 50ford500 04/20/2020 at 15:15

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https://finance.yahoo.com/quote/Uso?ltr=1

Manwich - now Keto-Friendly > davesaddiction @ opposite-lock.com 04/20/2020 at 15:24

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Well today has been very interesting. I never thought the idea of a negative price for oil was possible

Yet here we are.

I read that apparently some of the oil that was to be delivered in the May contract is getting rolled into the June contract. And that strongly suggests to me that the price on the June contract will get destroyed before long as well unless there is a HUGE pickup in demand for oil in the coming weeks.

Except I don’t see that happening.

I see demand gradually coming back, but it will take at least a year because there are a good number of businesses that shut down and aren’t coming back.

Gone > davesaddiction @ opposite-lock.com 04/20/2020 at 15:57

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Yup. TankerCos should do well...

davesaddiction @ opposite-lock.com > Manwich - now Keto-Friendly 04/20/2020 at 17:07

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Yep. Someone today on CNBC said they had a 4th quarter target in the $40s - I sure hope he’s right!

Manwich - now Keto-Friendly > davesaddiction @ opposite-lock.com 04/20/2020 at 18:10

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That might be a little optimistic.

But then again, what do I know? If you told me yesterday that oil would go into the negatives, I would have laughed at you.

I don’t think things will get completely back to normal until there is a vaccine for COVID-19.

And even then, there are a good number of businesses that will be permanently killed by this pandemic. They’ll eventually be replaced by other businesses... but it will take time.

Things are so crazy right now that I decided to dump my GUSH and am waiting by the sidelines for a bit.

davesaddiction @ opposite-lock.com > Manwich - now Keto-Friendly 04/20/2020 at 18:59

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Probably.

Hope you time the through just right!

Manwich - now Keto-Friendly > davesaddiction @ opposite-lock.com 04/20/2020 at 19:23

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I’m not worried about perfect timing. The way I see it, under normal circumstances GUSH moves with a S&P oil and gas producer index. That index rises and falls with the fortunes of the companies that make up that index.

Oil crashed today... yet this index and GUSH did not.

Why?

My main guess is Trump’s promise to help out oil companies by paying them to leave their oil in the ground... along with lots of thoughts and prayers.

Oh and some of these companies also have gas station and refinery businesses... but I can’t see those being enough of a compensation for what’s going on.

And the bigger thing is, I don’t trust Trump. I don’t trust him to deliver on what he says or do it in a way that someone doesn’t get screwed. And even if he wants to, the government probably doesn’t have the resources to help all companies to the extent they need.

So I’m anticipating that once an actual plan is revealed, it will be decided that it’s too little/too late and then there will be a correction in the coming days or weeks.