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Hobbyfarmer
Honored Advisor

Today's picture

20160210_091310-1.jpg

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9 Replies
marketeye
Veteran Advisor

Re: Today's picture

I'm reading that $25/barrel oil prices are likely. Iran has 30.0 million barrels of oil on floating storage ready to be poured onto the market. That sign could be changed soon.

 

Mike

 

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Hobbyfarmer
Honored Advisor

Re: Today's picture

My brother has a convenience store and says he is told it with be under a $ shortly. 

 

Already is if you take away the government tax grab portion of the price.

 

Put it on the shps at $70+ pay storage and take $20ish for it. that's about like "welding" bin doors shut. Very hard to s5ore an oversuppled commodity in to profitability.

 

If the price prediction is correct e85 will become unsellable. 

 

 

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sw363535
Honored Advisor

Re: Today's picture

paid 1.329 for regular last evening in Liberal, Ks

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hardnox
Advisor

Re: Today's picture

The hedgable contango is nowhere approaching $70 but it is substantial, and profitiable. As it should be in a market with these apparent fundamantals.

 

Logically, how a market ought to operate rationally is that as storage gets closer to being totally full the price of storage should begin to increase sharply (elevator ain't givin' no waiver on the in charge when there's a 200 bu crop).

 

And then, I guess since something has to give, the price of the oil goes even lower than it would otherwise.

 

Pull up a lawnchair a safe distance from the rail switch and bring the popcorn- there's going to be a trainwreck.

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roarintiger1
Honored Advisor

Re: Today's picture

Got news for you.  You won't have to be near the tracks to see this trainwreck. 

rawhide
Advisor

Re: Today's picture

I agree rt but I have been tryin to figure out who is gonna get blamed for the trainwreck?  The FED?  Obama? GWB?  It's gonna get ugly real quick

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westernia80
Senior Contributor

Re: Today's picture

Just heard on the radio that gas under a dollar outside of Dodge City KS

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sw363535
Honored Advisor

Re: Today's picture

It is the producers fault........... Overproduction and competitive capitalistic greed will be the line from the white house and the left side of congress...

 

Good thing they are fixing that..

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hardnox
Advisor

Re: Today's picture

The ideological folderol won't help but if it makes you all feel better.

 

The new output is primarily a North American phenomenon from non-conventional sources. $150 oil and strip mining of regs mobilized a vast amount of capital for high cost production. Much of which is rapidly heading to where money goes to die. (Chesapeake going down this month, perhaps- by far the biggest casualty yet).

 

As far as the "free market" goes, there's actually rarely ever been one in oil. The Texas Railway Commission and then OPEC regulated supply through most of the relatively brief Age of Oil.

 

Whatcha got here is a free market. Which is always right, right?

 

Worth noting that outside of N. American unconventional oil, the rest of the world has not quite been able to expand production even with huge financial incentives to do so.  It is tough to keep two different concepts in mind simultaneously- particularly if you don't like either one- but still worth disciplining yourselves to do.

 

Interesting times ahead. I don't think anybody knows- probably including them- but I've seen suggestions that Russia runs out of cash in 12 months or less. That's probably sooner than the Saudis and sooner than US production pulls back a lot- massive losses are going to run through our system but I think it is big enough to absorb them.

 

The ME could blow up at any time so I definitely don't want to be short oil here and wouldn't argue with anybody covering all or part of their usage here even if it will likely go lower.

 

 

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