https://www.cbc.ca/news/business/bitumen-wcs-wti-oil-1.5511386

Barrel of Monkeys now worth more than a barrel of Alberta oil

 

https://www.cbc.ca/news/business/bitumen-wcs-wti-oil-1.5511386

Barrel of Monkeys now worth more than a barrel of Alberta oil

​

 

Holy cheap oil, Batman!

WTI: $11.54 per barrel.

Taking inflation into effect, I don't think the price has ever been lower in my lifetime.

Edit:



from https://www.macrotrends.net/1369/crude-oil-price-history-chart

 

And gold is finally making its move:

 

Gas is on track for a (recent) historical low:

 

I don't think you even have to adjust it for inflation. The prior bottom in the last 70 years for WTI was $17.66 in November of 1998 -- that's 27.98 in current dollars (see NOTE) -- and gas prices around here were down to $0.779/gal at that time.

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Once again, those evil, greedy, price-fixing oil companies sure do seem to be doing a real lousy job of price fixing.

NOTE: The chart I was looking at was already inflation adjusted. The actual price was $11.22 in Nov '98 with a current price of $17.66.

 

I don't think you even have to adjust it for inflation. The prior bottom in the last 70 years for WTI was $17.66 in November of 1998 -- that's 27.98 in current dollars -- and gas prices around here were down to $0.779/gal at that time.

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Once again, those evil, greedy, price-fixing oil companies sure do seem to be doing a real lousy job of price fixing.

I did say, "in my lifetime".

Here are the historical non-inflation adjusted numbers:

 

I did say, "in my lifetime".

Here are the historical non-inflation adjusted numbers:

View attachment 204878

Oops, my bad. I didn't spot that the chart I was looking at had the inflation adjustment option checked. I thought that it had gotten down to the $13 range back in '98, but I wasn't sure what "it" was since there are several different oil prices that get cited, so I concluded that the $17.66 price must be what this price got down to. I see that WTI got down to $11.22 in Nov '98, so we are lower than that right now. It got to $10.42 in Mar '86, so it'll be interesting to see if it get below that.

 

...so it'll be interesting to see if it get below that.

That didn't take long:

West Texas Intermediate crude for May delivery tanked 76%, or $13.96, to $4.31 per barrel, its lowest level on record.

https://www.cnbc.com/2020/04/20/oil...res-in-focus-as-coronavirus-dents-demand.html

Edit: The Russians and Saudis are likely literally crapping their pants today.

 

That didn't take long:



https://www.cnbc.com/2020/04/20/oil...res-in-focus-as-coronavirus-dents-demand.html

Whoa! As I was looking at the chart I noticed that the 1973 oil shock seemed to set a bar at $10 a barrel that we've tickled several times, but haven't broken below.

Now, these are futures prices. I don't know how that relates to official WTI oil prices. I don't have that level of understanding of how these markets work.

 

I don't have that level of understanding of how these markets work.

My understanding: It's a "post-dated" contract. The buyer and the seller agree on a price to transact at a future date.

The contract itself has value: in the interim, the buyer can sell the contract -- useful if prices go up.

Upon expiration, the seller is committed to sell, and the buyer is committed to take delivery, at the agreed price.

https://www.investopedia.com/terms/f/futurescontract.asp

 

My understanding: It's a "post-dated" contract. The buyer and the seller agree on a price to transact at a future date.

The contract itself has value: in the interim, the buyer can sell the contract -- useful if prices go up.

Upon expiration, the seller is committed to sell, and the buyer is committed to take delivery, at the agreed price.

https://www.investopedia.com/terms/f/futurescontract.asp

That much I understand about futures in general. But I would imagine that there are futures contracts written for a specific expiration date that are all over the map. So what determines "the price" of WTI crude on a particular day?

We know someone is going to be buying crude oil in May for $4.31/bbl, but how does that relate to what the price shown in these charts will be a year from now when we are looking back at what May 2020 WTI crude oil price was?

On a different note, how can individual investors participate in something like crude oil futures. I'm assuming there are some kind of ETFs or the likes that aggregate futures contracts, but can an individual purchase futures contracts and what happens if it's held to expiration? I'm guessing that there must be a mechanism where I would be forced to sell the futures at the market rate on the expiration date.

 

That much I understand about futures in general. But I would imagine that there are futures contracts written for a specific expiration date that are all over the map. So what determines "the price" of WTI crude on a particular day?

I think the consumers of crude already have the price (really, cost) baked in by the contracts they purchased in the past.

What is a contract worth today? That's what markets are for: ask and bid -- when a seller finds a buyer, that is the price.

We know someone is going to be buying crude oil in May for $4.31/bbl, but how does that relate to what the price shown in these charts will be a year from now when we are looking back at what May 2020 WTI crude oil price was?

As far as I know, any inventory on hand that was already purchased at a higher price isn't so valuable today. But is there a retail market for oil to be shipped today? I dunno. My guess these things are as much as possible planned forward. The wildcatter (and his bank) needs to know that the oil is sold before it is pumped from the ground.

On a different note, how can individual investors participate in something like crude oil futures.

As an example, a Google search produced this:

https://www.tradestation.com/trading-products/futures/cme/

But I wonder as well: where would I put the oil if my futures expired? I imagine I'd have to sell it for a considerable loss to someone actually capable of taking delivery (had my futures expired today).

 

I still remember in the 60s when gas was ~65 cents/gal and people were buying Mercedes Benz 200D/220D/240Ds because diesel was 10 cents/gal. Still don't understand why it costs more than gas today.

 

That didn't take long:



https://www.cnbc.com/2020/04/20/oil...res-in-focus-as-coronavirus-dents-demand.html

Edit: The Russians and Saudis are likely literally crapping their pants today.

I'm assuming that this HAS to be an error:


https://www.macrotrends.net/1369/crude-oil-price-history-chart

It was $11.01 when I checked it earlier.

 

I still remember in the 60s when gas was ~65 cents/gal and people were buying Mercedes Benz 200D/220D/240Ds because diesel was 10 cents/gal. Still don't understand why it costs more than gas today.

I've seen it go above gas and below gas by significant amounts over time. It's pure supply and demand.

Also, the refineries have an amazing amount of latitude over what they get out of a barrel of oil. For a long time I assumed that it was a simple matter of fractional distillation and so, out of a particular grade of crude oil, you go x% of gasoline and y% of kerosene and so on. Not even close. They can fracture and process it so that they can move the percentages all over the place -- which is a good thing because otherwise you would have huge shortages in one portion and huge gluts in other portions. But there are still limits on this and so as relative demand moves around they can only accommodate it so far and so you still have shift in inventory that affect relative prices, both over very short terms and over fairly long terms.

 

I still remember in the 60s when gas was ~65 cents/gal and people were buying Mercedes Benz 200D/220D/240Ds because diesel was 10 cents/gal. Still don't understand why it costs more than gas today.

Google: https://www.convenience.org/Topics/Fuels/Key-Facts-About-Diesel

 

Maybe it's not a mistake. I checked again and it was $0.01/bbl. I looked at their live charts

https://www.macrotrends.net/2566/crude-oil-prices-today-live-chart


If this is real, this is very scary.

 

Looks like it really is true.

https://www.nbcnews.com/business/markets/oil-prices-tumble-lowest-level-1980s-n1187716

How can I participate in this? I'm willing to buy a million barrels at that price -- literally. Even if it goes to zero and I end up having to give it away.

 

Looks like it really is true.

https://www.nbcnews.com/business/markets/oil-prices-tumble-lowest-level-1980s-n1187716

How can I participate in this? I'm willing to buy a million barrels at that price -- literally. Even if it goes to zero and I end up having to give it away.

Ditto. Know of an empty tanker ship for sale somewhere? I've always wanted my own island.