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Crude Crashes To $36 Handle - Down 15% Since OPEC
How many times were we told that an OPEC decision was "priced in" - well it wasn't. WTI is now down 15% from pre-OPEC and has crashed through the $37 level for the first time since Feb 2009... time to catch a falling knife (again), or fold on all those 'recovery' bets?
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Just like all the Iranian oil about to flood the markets in Q1 is also priced in.... right?....right?
Word is they're about 10 miles offshore.....off Galveston.
$35 here we come.
I am *so excite* for even cheaper gas. Pretty soon it'll be down to $5 a gallon overhere in Rainbow land.
Gotta pay for those solar panels and wind farms somehow.
Not to worry. Turkey is working on starting a war with Russia, Syria, Iran, and Iraq. Saudi Arabia and Qatar are also going to jump in once these non-stop provocations start to work.
$36?? Holy smoking tent pole Batman!!
Not to worry?
This spells the end of the US oil industry. This was, until the summer of 2014, one of the few remaining productive US industry sectors, providing highly qualified and well paid jobs, and driving US GDP (though it was mainly debt driven: many shale oil companies have more bank loans than profits on their books).
Now that OPEC has decided to maintain their strategy of maximum supply, the US oil industry will get hammered into oblivion. Most shale oil companies will go belly up, possibly triggering another banking crisis (this time not a sub-prime mortgage crisis, but a sub-prime shale oil crisis) and most of those (highly qualified and well paid) US oil industry jobs will get lost. It will mean the end of US shale oil and the end of the dream of energy independence. Let's see how the banks are going to cut their losses of hundreds of billions of bad investments in the shale oil sector.
Looks like we may see ISIS take over the middle east after all...
Writing from the Bakken. The economy is getting CRUSHED out here. Real estate is crashing- many new Apt buildings at 30 percent occupancy or less and renting at 50 percent of their expected revenue. Drilling pipes are rusting in the yardm,businesses are shuttering overnight and large machinery is sitting idle. Off to work!
The junk bond market is going to blow the fuck up. Co's have cut to a minimum and are bleeding out. Everyday more and more homes are throwing up for sale signs at ridiculously high prices. Soon they'll be foreclosures...
just another daily article showing daily action moving toward the bottom daily... call me when it hits $25 (since it will), we should be about a month or so off from that...
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Peak oil! Peak oil!
Stop teasing.....you're just going to piss them off.
The pendulum swings...
central bank financialization has lead to capital and resource mis-allocation and mal-investment on a scale the world has never seen.
It's all about short term versus long term thinking. Can't wait to see what all those unemployed energy sector and financial sector workers will do.
No matter, such "let the majority eat cake" monetary experiments have been tried before and this one will end no differently motherfucker.
Strong dollar! Strong dollar!
this, so much this... as it stands, a US dollar buys three times as much oil as it used to basically a year ago... if you think that's impressive, look at natural gas prices in USD... it's deflationary now but no one can say with a straight face that cheap energy isn't going to have a positive impact on long term economic growth in the US... you can be a bear now, but I wouldn't stay one forever...
Misallocation of free gubmint money. Billions for them. 5 pounds of processed yellow "cheese" food for you.
Is it a scarier enough world yet at these prices?
Who the fuck needs oil anyway? Am I right? You basically can dig it out for as little as 5$. Oh come on. It's not like it is in any way essential. I mean you can't even pay your bills with it. Bitcoin, housing or stocks on the other hand - I can see value in that. But Oil? Gold? Silver? Iron? You can't pay a meal with that - only with a one Dollar note in your hands, son. Like it used to be in the 1900s when God still was alive and every motherfucker feared the white man.
Nah, just kidding.I am just crazy. Almost 8 years of this shit. Bring it on. Roll the nuclear bombs out and prove that blind Bulgarian chick right: That Obama is the last American president and Europe ceases to exist. I don't mind. I am in Vault 3017. See ya.
Nice flashback...
I miss the days when every motherfucker feared me.
funny, i went against all reason and news, and went long oil 2 weeks ago (small position) on the idea that the msm lies and oil will spike..well fucked again ..bombing oil production just makes it cheaper, tension in the ME of major war nato v russia,just makes oil cheaper...
And I have been shorting, so, thanks for your donations. Can it reach a sub $30 price?
@Fidel In a word; Yes
When the top financiers of the world view oil as cheap and fire sales in companies can be cherry picked the price will bottom. Then let the real turmoil begin to spike the price up again making the financiers owning even more of the worlds assets.
How much is enough? When they look in the mirror do they ask "Mirror, mirror on the wall who holds the most wealth and power in the world of all?" If they don't get the right response from the mirror they will get busy plotting how to get moar.
Another example of how you can't win playing their games. The markets can stay irrational a lot longer than you can stay solvent. I expected the whole market to blow up after the blatant theft of the bail-in of 2012, but here we still are today...
Cashed out my 401k several years ago and I just have $50 in stocks - I ended up somehow with a fractional stock I can't sell until the dividends bring me back up to a full stock sometime around 2022.
if you wanted to buy some oil you should have called me.
Don't fret pal. You can win it all back at the Indian casino down the street. Or there is always daily fantasy to get your gambling fix.
If I had enough mayonnaise jars I would store it at this price. Like most things that banks and hedge funds play with - you can expect them to crush the oil price, buy up the oil related companies and resources for cheap, and run the price back up. It might take them a while, but it will happen.
More fact than fiction in your post. There is a Load oil floating, sitting in storage finaced by free money just waiting for the first mushroom cloud event.
But never mind oil, gas..... will be cheap -cheaper for ever.
Except that it costs money every day to "store" that floating oil, and the rates are going UP. The biggest tankers cost over $100,000 a DAY. That rental sure eats into profits.
It's also a reason why oil is dropping. The tanker rental rates are rising, oil is dropping, so people are dumping stored oil.
Do the math. $100,000 a day to store 2 million barrels of oil. A $1 increase in oil price is wiped out by 20 days of storage.
Moar war should bring the price back up.
Any long only commodity hedge fund's money is morphing into much, much less money. State Govts. who gave the BIG SHOTS their taxpayers' money might be getting a bit nervous, scrambling to explain away the losses. The 2 and 20 people will never be held accountable, and I suspect that those people have yet to throw in their towels.
Nothing to worry about. It's unequivocally good for us.
Are you stackers stacking 5 gal cans?
55 gallon drums.
hang in there overmed; i thought the same thing about 4 years ago!!!! yipppppeeeee!! this here b bizarro-world ; where does one find a market valuation based on fundamentals? used to be raw land as a last resort, but with zero int rates, farmland is still way too high to get any sort of decent return which tells me we still have a ways to go before reset; which probably then means that now is the time to lever down on farmland x 3 in bizarro-think;
i guess u could say the WTF chart just got WTF'ier to borrow a phrase from the tylers;
We're going to see 99c per gallon at the pump before this collapse is over: imagine, 2-digit gas to 2-digit gas in one generation.
Gonna go and buy that 72 lincoln today, looks like a B52 smoke trail when you stomp on it.
I got me a car, it's as big as a whale and we're headin' on down to Love Shack.
Tin roof....rusted!
DEFLATION!!!! HELLO!!!!
Winding up the helicopters as we speak.
https://www.youtube.com/watch?v=nCU0_QHUO-M
Romeo Foxtrot......shall we dance?
Yes, but only if I can lead rose petal!!!
You are spot on, as it gets worse as in that .25 rate hike will suck out something like 600 billion in liquidity the dollar will further strengthen and fewer dollars chasing the same amount of goods will drive the price of oil as well as other commodities down.
2 Handle coming
The depletion of oil fields is not a joke. There is plenty of rusting equipment sitting in depleted fields around the world. The push into tar sands and shale oil was no joke either. The mouse click money guys thought the rise in oil prices would continue to be vertical as the major fields declined. The consequences of EROI slipped past them. The collapse in oil prices is the manifestation of deflation. The higher priced oil is too expensive for a contracting economy. As economic activity slows, the need for energy slows. The remaining oil will become more affordable as less people are able to buy it right up until the moment it is rationed.
And airfares are plummeting.
/sarc
Are they selling oil which doesn't exist again! Can't wait for the stronger dollar, via rate hikes, to kick oil while its down
Yield curve is not convinced of a rate hike this month.
So why isn't the price at the pump 1/3 the price of 5 years ago. Somebody is making a lot of money on the difference.
It's called "carbon taxes". You see, by raising taxes, the planet is now safer from climate change.
Get it? LMFAO!!!!
Barry and his communist/muslim partners are inflating energy (electricity and oil/gas )- more inflation, more oil company profit and bigger kickbacks for the lefties. Funny how natgas and coal are in the toilet.
We elected this asshole Barry twice. Careful with your next vote.
I've wondered about that myself. No data or info on it. Refiners typically have a very slim margin. But I wouldn't think for a minute that the refiners are pocketing all that money. If their profit per gallon goes from one cent to two cents, that's a 100% increase. People would be screaming out there if the refiners were making a huge windfall like thousands of percent. You have a good point. I'd like to see how all that difference is pared out in the system compared to in the past.
don't attribute to market forces that which can easily be attributed to tax schemes...
It's only the CRUDE component that's gone down by a third. What's the crude part of a gallon of gas? 60%? 50%?
There are 42 gallons in a barrel of oil, (out of which you get about 19 gallons of gas and 12 gallons of diesel and some other products) So for simplicity, say there's $1 of crude in a gallon of gas when oil is at $42.
At an average price of, say $2, that means that half of the cost of a gallon is other costs, which don't change, and in fact increase year over year.
So when the price of oil goes down, only the CRUDE component of a gallon of gas decreases. So if the price of oil drops by 50%, the price of a gallon of gas only decreases by 25%.
If crude oil was free, you would still pay $1 a gallon.
This is good news. The whales are now safe, for sure.
I'm thinking it may be time to buy some fwds and hedge with some SPY puts.
Interesting premarket activity. How about a 1000 point drop in the Dow after the open and a VIX spike above 40?
Can we 'enrich' some of that oil with a little CS-137 from Fuckushima? Kind of a new sort of 'dual-fuel' vehicle. . .
It is a fucking bloodbath in Iraq oil patch. IOCs have cut budgets 50%. Many companies starting to leave. Bad shit in the woods happening right now. Will get worse before it gets better.
As it gets to the point where all land storage tanks and ships are full, maybe the Saudis will not be able to give it away.