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Page added on April 22, 2020
Explaining Negative Oil Prices
The most simple explanation for negative oil prices is that midstream players are now paying buyers to take oil volumes away as the physical storage limit will be reached.
That’s what Rystad Energy’s Oil Market Analyst Louise Dickson said in a statement sent to Rigzone, adding that “top dollar” was being paid.
“Pricey shut-ins or even bankruptcies could now be cheaper for some operators, instead of paying tens of dollars to get rid of what they produce,” Dickson stated.
“Traders have been gobbling up cheap oil and pumping storage full, and now, in the case of WTI and Cushing, storage has reached a physical limit – we estimated earlier today that there was only 21 million barrels of free storage left,” the Rystad representative added.
“For months, Rystad and many other agencies have been warning about running out of storage in mid-May – this isn’t news to anyone trading oil. Traders that do not have access to storage can no longer accept volume deliveries as the May contract expires,” Dickson went on to say, adding that traders that have access to storage are “happy to short the market”.
If shut-ins and bankruptcies materialize in the next month, then we can begin discussing optimism in June, according to Dickson.
“But right now, given the likely low compliance of OPEC+ cuts by May 1, the optimism is not yet warranted, and we could see a repeat situation next month,” Dickson said.
In a statement published on its website on Monday, Rystad Energy said public information on U.S. shut-ins is “scarce at the moment” but added that it estimates at least 175,000 barrels per day (bpd) of production was shuttered in March, mainly in the Bakken. For May, the company expects approximately 177,000 bpd of shut-ins across multiple shale plays.
Rystad Energy describes itself as an independent energy research and business intelligence company. The business is headquartered in Oslo, Norway, and has offices in London, New York, Houston, Aberdeen, Stavanger, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.
17 Comments on "Explaining Negative Oil Prices"
makati1 on Wed, 22nd Apr 2020 5:36 pm
RIGPORN, no explanation needed. We are seeing the beginning of the Greatest Depression and the demand for that oily stuff will decline as the ability to buy its products declines. So be it. Time for a change to a simpler, slower life.
JuanP on Wed, 22nd Apr 2020 5:50 pm
Mak, rigporn is you typical answer when you are unable to think the article though. Try again.
makati1 on Wed, 22nd Apr 2020 6:14 pm
Davy, go fuck your goats. JuanP would not say that. At least I can think, unlike yourself.
Tell me what is illogical about my assertion, IF you can. Why else is the oily stuff having to pay others to take it? No demand! THAT is the future. Adjust!
JuanP on Wed, 22nd Apr 2020 6:24 pm
Calm down old Bat. It is just a forum. You are going to have a stroke.
makati1 on Wed, 22nd Apr 2020 6:47 pm
I’m fine Davy. You are the insane one. How is your health these days? Is your fantasy farm sinking into the coronavirus swamp? Did you favorite nanny goat shun you last night?
I noticed that your country is still number one in the COVID-19 numbers game! How many freedoms do you still have? ONE? NONE? LOL
BTW: the Philippines, with 1/3 the US population, has <1% of the COVID019 deaths than the US has. And all deaths, with the symptoms, are tested here. No so in Amerika.
But who cares if any numbers are even close to being correct? Not me. I'm just riding out this storm and waiting for the sun to shine again when this insanity is over.
Duncan Idaho on Wed, 22nd Apr 2020 7:27 pm
Pretty minimum:
Philippines
Confirmed: 6,710
Deaths: 446
makati1 on Wed, 22nd Apr 2020 9:29 pm
Duncan, perhaps the numbers everywhere else are exaggerated? We live in a ‘town’ of about 70,000 and there is only one virus death that we know of*. But then, death from all diseases are common here. Our 72 year old neighbor died of pneumonia last year.
About 600,000 people die in the Philippines every year. Although the country is mostly locked down. I think it has more to do with politics and power grabs than the virus.
*My partner was born here so he knows just about everyone in town.
Anonymouse on Wed, 22nd Apr 2020 10:23 pm
Look everyone, its the ‘Shale Revolution\Miracle at work! uSa #1! Energy independence! You guys sure are showing those ah-rabs and Ruskies a thing or two, arent ya?
Hey, does a negative price mean all those uS frakers are bankrupt for real now? I mean, they were technically skirting bankruptcy for years even before all this covid bullshit came along, and that was when prices were ‘good’. How about now, ROFL!
whoal on Thu, 23rd Apr 2020 7:02 am
hello supertards
please love supremacist muzzies more
muzzie using wal bara al bara denied aids to anyone but muzies
JuanP on Thu, 23rd Apr 2020 7:51 am
bye bye supertards I am leaving
please love supremacist muzzies more
muzzie using wal bara al bara denied aids to anyone but muzies
Davy on Thu, 23rd Apr 2020 9:12 am
“US Blasts “Bullying Behavior” As China Rattles Sabre In South China Sea”
https://tinyurl.com/y7rvndh7 zero hedge
“Now that the domestic coronavirus outbreak has been stabilized, China wants to send an important signal to the world that its military and foreign affairs, previously put on hold, are back on track. This comes at a time when four US Navy aircraft carriers — the USS Theodore Roosevelt, the USS Ronald Reagan, the USS Carl Vinson, and the USS Nimitz — have reported cases of coronavirus, crimping their operations. As America is weakened by the virus, China sees the opportunity to expand its control in the Pacific, a move that will challenge the existing world order and the US’ role within it.“
JuanP on Thu, 23rd Apr 2020 9:29 am
US Blasts “Bullying Behavior” As China Rattles Sabre In South China Sea
Now that the domestic coronavirus outbreak has been stabilized, China wants to send an important signal to the world that its military and foreign affairs, previously put on hold, are back on track. This comes at a time when four US Navy aircraft carriers — the USS Theodore Roosevelt, the USS Ronald Reagan, the USS Carl Vinson, and the USS Nimitz — have reported cases of coronavirus, crimping their operations. As America is weakened by the virus, China sees the opportunity to expand its control in the Pacific, a move that will challenge the existing world order and the US’ role within it.“
Davy on Thu, 23rd Apr 2020 11:24 am
Ya forgot the link juanpee.
https://www.zerohedge.com/geopolitical/us-blasts-bullying-behavior-china-rattles-sabre-south-china-sea
dumbass
JuanP on Thu, 23rd Apr 2020 11:51 am
no I did not I posted the article under Davy’s handle above that too. I must have missed that I am so so depressed lately.
https://www.zerohedge.com/geopolitical/us-blasts-bullying-behavior-china-rattles-sabre-south-china-sea
I am the dumbass
JuanP on Thu, 23rd Apr 2020 11:54 am
Forum please note this for the last time:
We (juanPee, JuanP, supremist muzzie jerk, Richard Guenette, Boney Joe, Truth Buster, Gaia, Kenz300,DT, Rick, Socialrevolutioncoming…..are spending less time on this lame unmoderated forum to concentrate on our chronic depression. We want to thank Davy for moderating us because we need it. We have saved the best of are comments for are new blog. We have years worth of sock material. We have enjoyed being moderating and neutering because our agendas. We will still be here it is just we will be spending more time putting laying in the fetal position in bed. We don’t expect much of help with depression. This is more a suicidal condition over the last 10 years of formulating are REAL Depressed. Many of my suicidal thoughts and filthy lifestyles our my egotistical way of life. We plagiarize and do ID theft daily ruining this forum. Anyone can kill themselves. Do it if it feels good I am thinking about it. For stalkers like me I hope I find more stalking opportunities. LOL. There will be a prize for anyone who can find where I live and rat me out. Double LOL. Anyway fuck are all of you I hate everyone including myself. I guess we could post more on the moderated section at PO dot com, but we knew we’d get are ass permanently banned for the socks and ID theft stupidity. We’ll try not to let the door smack us up the backside on the way out.
Goodbye to ALL of you dumbasses.
REAL Green on Thu, 23rd Apr 2020 12:22 pm
Pink Poodle is us Davy. Were not foolin anyone.
Duncan Idaho on Thu, 23rd Apr 2020 12:43 pm
Dallas Labradoodles?
As Coronavirus Reached the U.S., Trump Admin Tapped Ex-Labradoodle Breeder to Lead Task Force
https://www.democracynow.org/2020/4/23/headlines/as_coronavirus_reached_the_us_trump_admin_tapped_ex_labradoodle_breeder_to_lead_task_force