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The Price of a Barrel of Crude Oil
Old 04-20-2020, 11:08 AM   #1
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The Price of a Barrel of Crude Oil

Looked at the commodity prices this morning and was shocked to see crude oil was at $10.50 a barrel.

Just took a look now, barely an hour later and the price of a barrel of oil is at $5.04!

I think the last time oil was this cheap was in the 1970's.
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Oil/Energy: Be Greedy When Others Are Fearful ?
Old 04-20-2020, 11:29 AM   #2
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Oil/Energy: Be Greedy When Others Are Fearful ?

As I type, (according to Yahoo) May crude is 4.4000 -13.8700 (-75.92%)
I'd like to open a position related to the sector. Thinking of 3 possibilities.
Exxon, Chevron, or Fidelity Select Energy Portfolio (FSENX)

Any other ideas/suggestions ?
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Old 04-20-2020, 11:32 AM   #3
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Unbelievable!
I'm considering opening a position in the sector today.
If memory serves, Buffett has a famous saying. Be fearful when others are greedy, & greedy when others are fearful.

Yahoo shows may crude oil down 75.00% as I type.
That certainly seems like fearful to me.
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Old 04-20-2020, 11:40 AM   #4
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$2.68 and heading lower, may turn negative soon
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Old 04-20-2020, 11:42 AM   #5
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Bloomberg energy has Brent crude at +$26/gal. How does that happen? Maybe that market is closed as they are 9 hours ahead of West Coast time.
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Old 04-20-2020, 11:43 AM   #6
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It's currently $2.65. Inflation-adjusted, this is a small fraction of its lowest price in history.
I don't know what it this mean. If it holds at these prices, does this mean there could be economic collapse in oil-dependent countries?

Edit- it's now $1.12
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Old 04-20-2020, 11:45 AM   #7
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Yet the Vanguard energy ETF is only down about 1% today I don't understand.
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Old 04-20-2020, 11:46 AM   #8
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WTI could go negative. It’s not fear but massive overproduction and no place to store the excess petroleum.
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Old 04-20-2020, 11:50 AM   #9
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Yet the Vanguard energy ETF is only down about 1% today I don't understand.
I noticed the same thing when I got a quote for the top 10 holdings in a fidelity energy sector fund I'm considering buying at the close. 9 out of the 10 are down, but the worst one is only -6.00%.

Something fishy going on here.
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Old 04-20-2020, 11:53 AM   #10
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It's the May 2020 contract which is down to $1. Traders (speculators) are bailing on the contract as their is no place to store the oil. There are two elements to the oil market, speculators and commercial traders (producers and refiners). Producers sell to hedge production and refiners buy crude. Speculators were buying long positions at $20 with the hope that refiners were going to step in and buy. Now they are bailing. The June 2020 contract is over $20 now but there is still a supply demand imbalance.
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Old 04-20-2020, 11:54 AM   #11
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Quote:
Originally Posted by tfudtuckerpucker View Post
It's currently $2.65. Inflation-adjusted, this is a small fraction of its lowest price in history.
I don't know what it this mean. If it holds at these prices, does this mean there could be economic collapse in oil-dependent countries?

Edit- it's now $1.12
Newton's third law of motion is at work here.

I'm concerned the fallout from this will be painful for all of us in the future as the ripple effect will go deeper and farther than any of us can envision.
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Old 04-20-2020, 11:54 AM   #12
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Bloomberg energy has Brent crude at +$26/gal. How does that happen? Maybe that market is closed as they are 9 hours ahead of West Coast time.
First, not $26/gal, it's $26/barrel - 40 gallons in a barrel.

Second, WTI vs. Brent. You were looking at Brent.

WTI is so low because there is concern that the US storage facilities will soon be at capacity and unable to accept any more - meaning there's no place for the oil to go. They either give it away, pay for someone to take it, and/or shut things down.
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Old 04-20-2020, 12:06 PM   #13
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It's the May 2020 contract which is down to $1. Traders (speculators) are bailing on the contract as their is no place to store the oil. There are two elements to the oil market, speculators and commercial traders (producers and refiners). Producers sell to hedge production and refiners buy crude. Speculators were buying long positions at $20 with the hope that refiners were going to step in and buy. Now they are bailing. The June 2020 contract is over $20 now but there is still a supply demand imbalance.
Why are the energy ETF's not down more?
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Old 04-20-2020, 12:08 PM   #14
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Chevron CEO was on Cramer a few weeks ago.

I think that the industry is under enormous pressure. There is no hurry.
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Old 04-20-2020, 12:13 PM   #15
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I see this on Yahoo finance.
Attached Images
File Type: jpg Oil Price low..jpg (19.7 KB, 443 views)
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Old 04-20-2020, 12:19 PM   #16
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It's the May 2020 contract which is down to $1. Traders (speculators) are bailing on the contract as their is no place to store the oil. There are two elements to the oil market, speculators and commercial traders (producers and refiners). Producers sell to hedge production and refiners buy crude. Speculators were buying long positions at $20 with the hope that refiners were going to step in and buy. Now they are bailing. The June 2020 contract is over $20 now but there is still a supply demand imbalance.
Thanks for the explanation.
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Old 04-20-2020, 12:20 PM   #17
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It has to be some kind of technical/trading error, but as I type, yahoo is showing crude oil at 0.1500 -18.1200 (-99.18%)

https://finance.yahoo.com/quote/CL=F?p=CL=F
Not an error. The traders are being eaten by the bears. That's the US oil contract. US storage tanks are filling fast and there is nowhere to put the production.
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Old 04-20-2020, 12:24 PM   #18
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Why are the energy ETF's not down more?
Energy ETFs are tracking stocks not the short term price swings of crude oil. The question you should be asking is how have energy ETFs performed during the last four years. Many energy stocks are going to zero. The irrational trading that you see in energy stocks is due to fund flows and re-balancing.
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Old 04-20-2020, 12:24 PM   #19
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Oil-Pricing-042020.jpg
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Old 04-20-2020, 12:25 PM   #20
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Not an error. The traders are being eaten by the bears. That's the US oil contract. US storage tanks are filling fast and there is nowhere to put the production.
So I'm assuming you feel the same way as Brat, don't be in any hurry to get into that sector ?
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