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elcheapo
Veteran Advisor

Free fertilizer and fuel !!!!

My phone went off this afternoon.

It said crude traded at -37 !!!

Is this legally possible ?

Where is the FCTC at ???

Again...it was paper....but isnt

It that it has to be backed

By real somewhere.

Look at this kids...it traded...

You could force delivery...

Everyone is crying for the

Oil company.....no dont

Do that....oil will come back

And imagine, running a refinery

With oil, you are getting paid

$37 a barrell !!!

With prices that low...has fert

Or disel went down....should have !

Just goes to show...the market is

Broken and rigged.

 

6 Replies
sdholloway56
Senior Advisor

Re: Free fertilizer and fuel !!!!

Grandpa Ranty paid $80/bbl too much to fill the reserve.

sdholloway56
Senior Advisor

Re: Free fertilizer and fuel !!!!

I guess the implication is that, at least for the moment, landlocked interior oil is worth next to nothing.

But a negative print is basically a paper event. If someone got caught long May and there is absolutely nowhere to store it then it is their moment in the barrel, no pun intended.

They just have to sell their way out, at whatever price.

elcheapo
Veteran Advisor

Re: Free fertilizer and fuel !!!!

Ya know....if I would pay someone

$1 or $2 a day to store oil for a

Week or two...bet you would get

Some takers....

I believe this is called "a chance

of a lifetime"

 

0 Kudos
sdholloway56
Senior Advisor

Re: Free fertilizer and fuel !!!!

Thinking it through.

Actually, to correct myself slightly, it is just FND and there's still 100K+ in open interest in the May.

So not near over.

But yes, there's a price where every possible way of arbitraging it will be attempted although I can't claim to understand all that would be involved. Truck it somewhere? Rail it to the coast for floating storage? Those are games for people who know the logistics game.

BTW, right this moment there is huge carry in the market, encouraging anyone who can to do so. But other than the expectation that governments have to do something I think the deferreds are overpriced just on the basis of demand expectations.

 

0 Kudos
sdholloway56
Senior Advisor

Re: Free fertilizer and fuel !!!!

CLK open interest implies 100 million barrels.

Cushing shows 21 million of unused storage.

Pounding 10 lbs of #### down a 2 pound hole.

sdholloway56
Senior Advisor

Re: Free fertilizer and fuel !!!!

Above my pay grade as far as how commercials play the game going into and during deliveries.

But if a refiner had a crack hedge on (long crude and short products) they got crucified.

On the other hand if a producer had a short hedge on from 30 they could gotten 80 for their crude.