$5 a barrel oil

Glaciers

Glaciers

Alaska Land of the Midnight Sun
I live in Alaska and our State Government's budget is about 90% based on oil. Alaska depends on $50 oil to break even,
I know that other State Governments depend on oil as part of there budget also, and it will hurt, but, Alaska will have to shut down because of zero diversification.
 
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Glaciers

Glaciers

Alaska Land of the Midnight Sun
If the distributors would buy it at that price, I'd fill all of my fuel tanks with #1 heating fuel. I'm going to set up a spare 500 gallon tank and fill it also. With my current tanks and the extra 500 gallons, I should be good for 2 winters, maybe. Going to fill them anyway because I have not seen these prices, (2 weeks ago $1.95) for many years.
 
Hawk

Hawk

Well-Known Member
They were saying on the news it had gone below zero, which means the producers are paying people to take it because it cost more to store it than it was worth.
 
RicinYakima

RicinYakima

High Steppes of Eastern Washington
Saw this in 2009 in eastern Montana. The Billings refinery was putting gas and diesel in filling stations for free and the stations didn't have to pay for it until it was sold. There just isn't anyplace to put it now.
 
462

462

California's Central Coast Amid The Insanity
A while back Fiver mentioned something about oil companies paying us, and what with today's news he was spot on.
 
StrawHat

StrawHat

Well-Known Member
What did I read, if the price of oil drops much lower, ExxonMobil is going to lay off a few Senators?

Kevin
 
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Brad

Brad

Benevolent Overlord and site owner
Staff member
This can quickly get into politics, let’s be careful.
 
462

462

California's Central Coast Amid The Insanity
There is no rational explanation for the markets' fickleness.
 
fiver

fiver

Well-Known Member
contracts are coming up in May, someone could really take a major loss if they ain't real careful.

on the bright side those brilliant operators in the Ukraine pledged to drop production by 50-K barrels a day.
then their prez was reminded they could only produce 35-K barrels a day at full output.
[Ukraine is a gas field and oil is a sideline [literally] product]
so umm well, uh you know? that wasn't really possible, he had to redact his statement.
 
P

Petrol & Powder

Well-Known Member
If you study the history of petroleum you will find that the price of oil has occasionally dropped to zero. This possibility terrifies the oil industry and for good reason.
The rule of supply and demand is always present and when there is too much supply the price of anything will drop. In an industry that has extraordinarily expensive overhead and infrastructure (like the oil industry) the risk of your product being worthless (or nearly worthless) is a real concern. In the early 1930's, overproduction of oil drove the price of oil below 13 cents per barrel and resulted in martial law being declared in parts of Texas.
In the current situation we had the confluence of two events: A price war between major producers (over-production) AND a dramatically reduced use of oil due to COVID19 (reduced demand). That combination resulted in a huge abundance of oil and no place to sell it.

If you're interested in the history of oil - An EXCELLENT book is, "The Prize, the epic quest for oil, money & power", by Daniel Yergin. There is also an 8 part documentary of the same name that is directly based on that book. I believe it's available on Amazon Prime.
 
Brad

Brad

Benevolent Overlord and site owner
Staff member
It isn’t just oil right now. Pork producers in Iowa can’t find a market for their hogs. Estimate I saw yesterday is that they may see a $37 per head loss on sale. When pork producers are talking about euthanasia instead of seeking it is frightening.
My daughter is thinking about buying a whole hog for butcher. She just needs space in the freezer.
 
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