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Crude Carnage Continues - WTI Tumbles To $38 Handle

Tyler Durden's picture




 

Following Friday's plunge after OPEC "held" steady, confirming the strategy of crushing US Shale is here to stay, WTI Crude has continued its carnage and is back to a $38 handle for the first time since the August-month-end meltup... very close once again to cycle lows.

 

 

Testing cycle lows...

 

Charts: Bloomberg

 

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Mon, 12/07/2015 - 09:36 | 6887175 -.-
-.-'s picture

This means war.

Mon, 12/07/2015 - 09:38 | 6887188 VinceFostersGhost
VinceFostersGhost's picture

 

 

Sooooo.....who isn't bombing Syria right now?

Mon, 12/07/2015 - 09:46 | 6887213 Manthong
Manthong's picture

So when do we finally get a negative price on gas?

It’s time that they pay me for helping to reduce the glut.

 

Mon, 12/07/2015 - 10:43 | 6887489 ZD1
ZD1's picture

Gas prices will only continue to go up in Democrat controlled socialist paradises like California which has the highest gas taxes in the country along with global warming fees that are tacked on top of every gallon of gas sold.

 

http://www.mercurynews.com/mr-roadshow/ci_28482045/roadshow-why-californ...

Mon, 12/07/2015 - 10:51 | 6887552 gatorengineer
gatorengineer's picture

Sorry I believe Pennsylvania beat cally on the tax we are paying 230 a gallon. And quickly catching up on the socialism factor.

Mon, 12/07/2015 - 12:15 | 6887692 ZD1
ZD1's picture

California has global warming fees tacked on top of the gas taxes.

 

The average gas price today in California is $2.69/gallon.

Only the island state of Hawaii is higher at $2.79/gallon.

 

http://www.californiagasprices.com/Prices_Nationally.aspx

Mon, 12/07/2015 - 11:20 | 6887716 Hans-Zandvliet
Hans-Zandvliet's picture

In the Netherlands we top that hands down: 1.70 Eurro per litre = $6.95/USgal

But the advantage is that the roads are not riddled with potholes and our bridges are not falling down (so you have less damage to repair on your car ;-)

Mon, 12/07/2015 - 11:38 | 6887781 ZD1
ZD1's picture

The socialists in the Netherlands can get away with outrageous gas prices because it's a small densely populated country with many transportation options that can easily be traversed in a couple of hours.

Mon, 12/07/2015 - 11:42 | 6887880 Vlad the Inhaler
Vlad the Inhaler's picture

Perhaps you've never heard of internalizing external costs, you should look it up.

Mon, 12/07/2015 - 12:14 | 6887941 ZD1
ZD1's picture

 

 

Internalizing external costs = leftist socialist bullshit to justify raising taxes.

When is China going to start internalizing external costs?

Mon, 12/07/2015 - 09:44 | 6887215 SmallerGovNow2
SmallerGovNow2's picture

Excellent question.  And further, what is the motivation????

Mon, 12/07/2015 - 09:45 | 6887224 Haus-Targaryen
Haus-Targaryen's picture

Canada.

Mon, 12/07/2015 - 09:55 | 6887276 Kirk2NCC1701
Kirk2NCC1701's picture

Who's gonna be the first to light up KSA?   Not China or USA, that's for sure.

Mon, 12/07/2015 - 09:38 | 6887193 slaughterer
slaughterer's picture

Once WTi is in the mid $30s, upper $20s is not too far off.  

Mon, 12/07/2015 - 09:52 | 6887260 LawsofPhysics
LawsofPhysics's picture

Already at war.  The sheep wil be the last to know.

same as it ever was.

Mon, 12/07/2015 - 09:45 | 6887227 Takeaction2
Takeaction2's picture

Look at the 3 year Natural Gas chart...Wow.  I am not a trader... The reason I looked was due to the fact that I received my latest gas bill and it was really really low.  It is down about 30% to 40% as compared to last year.  This deflation shit is getting really weird.  Gas and other resources crashing...stock market at tip top, Gold and Silver smashed.  Something has to give?  Oil at $38  Really?  I keep wondering if this is the US bullshit game to put the pinch on the Russian economy.  THe Saudis are in bed with us...right?  It does not seem normal that the oil price is falling through the floor and they keep saying "Oh we will just keep producing more and more.."  Yeah ...Why cut production in this Bizarro World...FUCK IT...Ramp it up.  Tankers lined up just sitting off the coast...oil gushing everywhere.  Let's get this bitch down to 5 cents a gallon like Venezuela.  

Mon, 12/07/2015 - 09:51 | 6887246 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Conclusion: this isn't going to end well.

I got 2 cars for sale. Looks like I picked the right moment... or maybe just too late.. we'll see.

Mon, 12/07/2015 - 09:38 | 6887190 Doubleguns
Doubleguns's picture

So now we look for the 20 handle. 

Mon, 12/07/2015 - 09:39 | 6887197 nmewn
nmewn's picture

Peak oil! Peak oil!

Everyone run out and buy Prius' & solar panels or you'll all die!!!

Mon, 12/07/2015 - 09:44 | 6887217 bada boom
bada boom's picture

Yes, look at US gasoline consumption since 2008, straight down.  The good old days are gone.  Nothing to do with the prius and panels that for sure.

Mon, 12/07/2015 - 09:54 | 6887272 LawsofPhysics
LawsofPhysics's picture

Yes, if only we were not still an importer of oil.

You do realize that oil goes into a lot more than just gasoline?

the spice must flow....

Mon, 12/07/2015 - 10:08 | 6887305 bada boom
bada boom's picture

Yes, but I would think gasoline is at the top of the list.  Maybe heating oil as well, but heating oil has been on decline as well because people are converting to nat gas.  Maybe people are not buying as much plastic crap from china too.  I was trying to link some of the oil price decline due to decline in US consumption.   The world is most likely same.

Mon, 12/07/2015 - 10:07 | 6887328 two hoots
two hoots's picture

Just a population reminder about resource demand:

US - 320,000,000  (less than 5%)

World - 7,300,000,000

Mon, 12/07/2015 - 10:14 | 6887342 bada boom
bada boom's picture

Yes, and who consumes most of the energy per capita.  The US.

And it looks as though the US still consumes the most amount of oil in total,

http://static1.squarespace.com/static/52abb9b9e4b0cb06a591754d/t/53c5e84...

Mon, 12/07/2015 - 10:21 | 6887392 post turtle saver
post turtle saver's picture

well you don't get to be the largest GDP in the world by sitting on your ass doing nothing... getting shit done requires energy, for better or worse...

Mon, 12/07/2015 - 10:24 | 6887411 bada boom
bada boom's picture

Yeah, go out at lunch today and see all that productivity on the roads.  Shopping, shopping, and little more shopping.

Mon, 12/07/2015 - 10:25 | 6887419 post turtle saver
post turtle saver's picture

you know nothing, bada boom

Mon, 12/07/2015 - 11:05 | 6887542 bada boom
bada boom's picture

Here's some info and a link to EIA,

"Petroleum products include transportation fuels, fuel oils for heating and electricity generation, asphalt and road oil, and the feedstocks used to make chemicals, plastics, and synthetic materials found in nearly everything we use today. About 76% of the 6.97 billion barrels of petroleum products that were consumed in the United States in 2014 were gasoline (47% of total petroleum consumption; includes biofuels), heating oil and diesel fuel (21%), and jet fuel (8%)."

https://www.eia.gov/tools/faqs/faq.cfm?id=41&t=6

Note, it states 76% of the barrels consumed were gasoline.  The total numbers do not match, but heck its a .gov site.

 

Again, I was only trying to emphasize the decline in consumption.  At the retail end.

 

Mon, 12/07/2015 - 10:19 | 6887383 post turtle saver
post turtle saver's picture

you also realize that we're large exporter of finished petroleum products, and that this trend has been increasing since 1984? not to mention a huge ramp starting in 2004?

the US is the largest refiner in the world... not all the oil that comes here stays here... something to bear in mind when looking at the import numbers, since many of the large producers of crude have little if any capability of refining it... Saudi Arabia has to _import_ gasoline to keep up with domestic demand, as one of many examples...

Mon, 12/07/2015 - 10:29 | 6887432 bada boom
bada boom's picture

That will still support the argument the US economy is in an ongoing decline, no?  Any links to the huge ramp?  We are still running trade deficits like crazy.

Mon, 12/07/2015 - 10:41 | 6887504 LawsofPhysics
LawsofPhysics's picture

Yes, some good news, but China can copy that technology too.  In addition, we represent a minority of the earth's population, yet consume the majority of the planet's resources.

Think that is sustainable?  Good luck with that.

Mon, 12/07/2015 - 09:59 | 6887294 nmewn
nmewn's picture

So Obama's graft & corruption actually works! Thank the lawd we're sav-id!!!

Couldn't possibly have had anything to do with people driving LESS at 4 plus a gallon, nope, no way...lol.

Mon, 12/07/2015 - 10:22 | 6887399 bada boom
bada boom's picture

Thats the funny thing, you would think with gas prices in decline for a while now from the $4 mark, that consumption would increase, but it hasn't.   I think part is due to the SUV market decline as well as decrease in driving (cars and trucking).

Mon, 12/07/2015 - 10:29 | 6887445 de3de8
de3de8's picture

Or buy fuel efficient vehicles

Mon, 12/07/2015 - 10:25 | 6887413 post turtle saver
post turtle saver's picture

nmewn, people were so damned worried about oil that they forgot the real reason for fracking is _natural gas_

the US is swimming in natural gas reserves like Scrooge McDuck... look at the price and futures on it, if it were any cheaper they'd be paying us to use it... Pickens was absolutely correct when he stated that the oil industry pulled off yet another miracle for the US by modernizing basic fracking techniques in the fields, we have so much natural gas now we can reasonably talk about making coal power generation obsolete... something that I never thought I'd see in my lifetime, that's for sure...

Mon, 12/07/2015 - 10:56 | 6887587 OutaTime43
OutaTime43's picture

Actually ultra low prices is a prediction of what to expect during peak oil. High volatility in prices was one of the expectations. Just look at an oil price chart from the 80's up until around 2005. Relatively low volatility. Look at today.
We should expect super low prices driving out drillers followed by a snap back up to high prices once the economy tries to "grow" again. We hit the limit, prices spike, world economy weakens, prices fall ("supply glut") and the cycle repeats. Each cycle is worse and shorter in duration.

Mon, 12/07/2015 - 11:34 | 6887824 Mayer Amschel R...
Mayer Amschel Rothschild's picture

Peak-Oil tears of unfathomable sadness are delicious.

Mon, 12/07/2015 - 09:40 | 6887200 buzzsaw99
buzzsaw99's picture

petroleum engineering students about to graduate must be beyond despondent.

Mon, 12/07/2015 - 09:52 | 6887261 _ConanTheLibert...
_ConanTheLibertarian_'s picture

They will drench themselves in petroleum and light it on fire.

Mon, 12/07/2015 - 09:53 | 6887263 Kirk2NCC1701
Kirk2NCC1701's picture

Petroleum Jelly.  There's an app for that.

Mon, 12/07/2015 - 09:58 | 6887287 Silverhog
Silverhog's picture

Good thing NJ still employs gas station attendents. 

Mon, 12/07/2015 - 10:12 | 6887350 tarsubil
tarsubil's picture

I told my nephew to be a petroleum engineer but he didn't follow my advice. Really dodged a bullet there.

Mon, 12/07/2015 - 09:41 | 6887204 slaughterer
slaughterer's picture

Whoever loves "Oil God" Andy Hall needs to keep a close eye on him now: remove all firearms and sharp instruments from his home starting today.  Also, get rid of any pharmaceutics, and take away his car keys and staple guns.    If you love him, you need to keep him alive through his "dark days."

Mon, 12/07/2015 - 09:40 | 6887205 Mark Mywords
Mark Mywords's picture

See ya @ $20 oil on our way to $200 oil!

Mon, 12/07/2015 - 10:26 | 6887424 SirBarksAlot
SirBarksAlot's picture

You called it!

As soon as the elite get rid of the little guys, the price will go through the roof and we'll be back to "Peak Oil."

Mon, 12/07/2015 - 11:45 | 6887894 Vlad the Inhaler
Vlad the Inhaler's picture

They just need to come up with a catchy name for their western cartel.

Mon, 12/07/2015 - 09:44 | 6887221 wmbz
wmbz's picture

Pump baby Pump! $20.00 sounds good to me!

Mon, 12/07/2015 - 09:45 | 6887228 two hoots
two hoots's picture

The air is thick. 

Mon, 12/07/2015 - 09:46 | 6887231 silverer
silverer's picture

Oops.  Time for another credit adjustment.

Mon, 12/07/2015 - 09:47 | 6887237 Monetas
Monetas's picture

"Crushing US shale !" .... explain to the Saudis .... that's how you get shale oil ?

Mon, 12/07/2015 - 09:48 | 6887240 slaughterer
slaughterer's picture

Perfect time for Mr. Yellen to raise rates!

Mon, 12/07/2015 - 09:48 | 6887244 aliki
aliki's picture

that "oil analyst" from RBC coming on CNBC today explaining why oil will never break 100, 90, 80, 70 ...???

Mon, 12/07/2015 - 09:50 | 6887250 LawsofPhysics
LawsofPhysics's picture

A sale on oil and products derived from oil?  All I can say is thank you.

Mon, 12/07/2015 - 09:58 | 6887270 VinceFostersGhost
VinceFostersGhost's picture

 

 

The price of energy will necessarily rise......err fall.

 

Wait....what?

 

No one has to buy your overpriced energy Obama....and guess what.....they're not.

Mon, 12/07/2015 - 09:54 | 6887269 Wahooo
Wahooo's picture

What's with the "handle" stuff?

Mon, 12/07/2015 - 09:59 | 6887280 JPMorgan
JPMorgan's picture

The price at the pump hasn't crashed yet! funny that. 

Mon, 12/07/2015 - 10:30 | 6887453 post turtle saver
post turtle saver's picture

I remember paying $4 a gallon for 93 premium in Texas not too long ago... the same station was selling it for $2.53 when I filled up yesterday, and 87 regular is now around $1.74... I don't know if that constitutes a 'crash' necessarily... maybe a 'plunge', it's much cheaper regardless...

Mon, 12/07/2015 - 12:33 | 6888133 JPMorgan
JPMorgan's picture

Lucky you.

I just worked it out in dollars, in this part of the world we are paying almost $6 a gallon for premium.

 

Tue, 12/08/2015 - 10:19 | 6893117 post turtle saver
post turtle saver's picture

don't attribute to market forces that which can easily be attributed to taxes...

Mon, 12/07/2015 - 09:59 | 6887290 Kirk2NCC1701
Kirk2NCC1701's picture

At this rate, they'll be able to compete with ISIS/DAESH prices, and truck it to Israel via Jordan.

Mon, 12/07/2015 - 10:03 | 6887313 blown income
blown income's picture

Know 2 people who have been laid off and another who had OT cut and he was at the lower end of help last week.

 

It is finally hitting Lafayette la 

 

The Mrs went out Friday with girl scout moms.Said the restaurant was stupid packed with obese herd 

 

 

She had salad and water

Mon, 12/07/2015 - 10:05 | 6887320 wizteknet
wizteknet's picture

Carnage on the street for energy jobs is more like it...

Mon, 12/07/2015 - 10:18 | 6887374 VinceFostersGhost
VinceFostersGhost's picture

 

 

Sucks.....those are the only guys that could afford healthcare.

Mon, 12/07/2015 - 10:23 | 6887366 praps
praps's picture

There's an obvious easy way to stabililize the price of crude.  The Fed prints money and buys all the oil futures contracts.  As the contracts come due, pour all the oil into Mexican Gulf and set fire to it.  QE for oil.

 

A similar approach can be taken for all commodties.  Just throw all suplus in the ocean.

Mon, 12/07/2015 - 10:21 | 6887391 dogismycopilot
dogismycopilot's picture

We are planning for oil to hit high 20s but briefly in 2016. It will be 2017 before we see it above $50. But from 2018 we expect it to take a considerable jump up. 

But who really knows - what is fucking everyone up is the volatility. No one can plan for shit with all of the volatility.

Mon, 12/07/2015 - 10:30 | 6887435 John Law Lives
John Law Lives's picture

It is hard to find bullish news for oil and/or natty gas these days.

1. OPEC is pumping away despite global oil glut.

2. Strong dollar.

3. Mild winter forecasted in much of US.

4. Anemic global economic growth.

Ouch...

Mon, 12/07/2015 - 10:30 | 6887449 slaughterer
slaughterer's picture

Shale is Stale. 

Mon, 12/07/2015 - 10:32 | 6887462 henry chucho
henry chucho's picture

The Amerikan fracking industry is like an old hooker,the more they pump,the cheaper the price for the hump..

Mon, 12/07/2015 - 10:35 | 6887478 Yttrium Gold Ni...
Yttrium Gold Nitrogen's picture

I wonder if the algos will propel it higher on no news whatsoever.

Mon, 12/07/2015 - 11:08 | 6887663 Francis Marx
Francis Marx's picture

Just sold my USO oil PUTs/shorts . Did very well.

Mon, 12/07/2015 - 11:38 | 6887846 Mayer Amschel R...
Mayer Amschel Rothschild's picture

Bottom's almost in.  Back to $60 before <$10 in 15-20 years.

Mon, 12/07/2015 - 12:14 | 6888032 Grandad Grumps
Grandad Grumps's picture

With oil so low the cost of producing everything, including gold is now much lower.

Mon, 12/07/2015 - 12:41 | 6888178 Bunga Bunga
Bunga Bunga's picture

Cramer's WTI long trades blew up. He is so furious at the OPEC non-cut. http://www.cnbc.com/2015/12/07/cramer-opec-meeting-devastating-for-us.html

Mon, 12/07/2015 - 12:43 | 6888190 Goldbugger
Goldbugger's picture

Refineries are loosing their asses.

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