Holy hell. https://t.co/smtgFW9VZg— Rick Wilson (@TheRickWilson) April 20, 2020
To understand this, but oil dropping to $3 bbl is not a good thing.
WTI Crude ended the day trading at -$35.00 a bbl. Oil storage facilities were literally paying shippers to remove the oil from their tanks so they could take in the oil coming from the fields. Because no one is buying oil for cars, planes, trucks, etc.
You may curse "Big Oil" and think this is their comeuppance. Having lived in Texas most of my life, I can tell you that "Big Oil" is primarily a huge number of small companies and even larger number of individual employees. The oil companies you are familiar with do drilling and exploring, but most of their product comes from small suppliers, because Big Oil is marketing more than anything else. And besides, its hires small companies to do all that drilling and transporting. Big Oil is largely finance and marketing. They won't suffer from this before small companies and cities full of individuals do. Texas went through this in the '80's, and it was supremely ugly. Now much of the American West is going to go through it (Colorado is experiencing a population boom. Care to guess why? I'll give you three, the first two don't count. Colorado is not alone.).
The unemployment problem just got one helluva lot worse. I don't even know what -$35.00 bbl WTI crude means. Nobody does. It's never happened before. Before you start cheering cheap gas, think of how many more people will be unemployed and WON'T be going back to work when the country "re-opens."
This isn't bad; this is potentially apocalyptic. Since it's not the DJIA, don't expect Trump to begin to wrap his tiny head around it.
Hell, I can barely take it in. Seeing tweets about "Shut in the wells!" Sure, and put all those people out of work, too. And the people they buy food and clothing from? And pay rent to? The ripple effect here is huge, and as I way, won't start to end when stay-at-home orders do.
CRAZY! You get paid by oil sellers to take the stuff off their hands as WTI oil trades at MINUS $37 Dollar per barrel. pic.twitter.com/ilcnNaQbtf— Holger Zschaepitz (@Schuldensuehner) April 20, 2020
The pressure on Donald Trump to place tariffs on foreign oil is going to increase significantly. And negative WTI prices may give him the cover he needs. Here Senator @JimInhofe (Rep, OK) asking for tariffs, accusing Saudi Arabia of flooding the market despite OPEC+ deal | #OOTT pic.twitter.com/lgAOZkaXlZ— Javier Blas (@JavierBlas) April 20, 2020
That's not gonna do anything at all. Oil is a commodity, not a product. Saudi Arabia sells on the global market, not to the gas station near you.
Historic day in the oil market as #WTI closed in negative territory for the first time in history. BUT: things may not be as bad as they seem with longer-term contracts trading above $20/per barrel #OOTT #Oil— Pippa Stevens (@PippaStevens13) April 20, 2020
Read more here👉https://t.co/YetkcjT1Db pic.twitter.com/GU0f7lDzFg
If there's a reason people aren't laid off by whole states by tonight, that will be it. Cold comfort, however.
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