Official (Alberta) Oil Discussion Thread

[Bring_Back_Shantz]

Originally Posted by RichieRich

How is it that when the major trading has runaways they shut the market down for a while. ie TSX, Nasdaq, Dow. but not oil?

It's easy to say "No one can trade stocks right now".
It's impossible to say "No one can sell oil right now" because it's all still flowing.
It's gotta go somewhere, so you gotta be able to buy/sell it.

[csnarpy]

It’s just the end of the May contract. They expect it to be back at $20 tomorrow once June contract kicks in.

Now, never investing in oil before, can invest in today’s price and get paid out in tomorrow’s price? Even though it’s a different contract?

[nik-]

Originally Posted by csnarpy

It’s just the end of the May contract. They expect it to be back at $20 tomorrow once June contract kicks in.

Now, never investing in oil before, can invest in today’s price and get paid out in tomorrow’s price? Even though it’s a different contract?

I mean think about what you just said.

[csnarpy]

Also, it’s now at -55 ala, after hours trading....

[GGG]

Originally Posted by csnarpy

It’s just the end of the May contract. They expect it to be back at $20 tomorrow once June contract kicks in.

Now, never investing in oil before, can invest in today’s price and get paid out in tomorrow’s price? Even though it’s a different contract?

You need to find a place to store your oil for 1 month.

Oil is a real thing not an abstract thing like a stock.

[DuffMan]

could this be the turning point for fossel fuels?
renewable energy has come a long way, but relying on fossel fuels for so long and believing it was going to be around for our lifetimes, might not pan out.

[nfotiu]

Originally Posted by DuffMan

could this be the turning point for fossel fuels?
renewable energy has come a long way, but relying on fossel fuels for so long and believing it was going to be around for our lifetimes, might not pan out.

I'm not following the logic. A over-abundance of super cheap gas would seem to have the opposite effect in encouraging renewables.

[accord1999]

Originally Posted by DuffMan

could this be the turning point for fossel fuels?
renewable energy has come a long way, but relying on fossel fuels for so long and believing it was going to be around for our lifetimes, might not pan out.

Cheap oil should do a great job of obliterating EV sales (which had already stagnated globally in 2019 thanks to Chinese withdrawal of EV subsidies).

You only worry about oil if you think cars won't be back after the lockdown is over; but the anecdotal evidence out of Wuhan is that likely cars will be stronger than ever as people are scared about the safety of mass transit. Without an effective vaccine, COVID is going to be crippling to mass transit in Canada, and will probably put most of the mass transit systems in the US into a death spiral.

[RichieRich]

Originally Posted by GGG

You need to find a place to store your oil for 1 month.

Oil is a real thing not an abstract thing like a stock.

Might be silly to ask but how is it that different than trading gold or other commodities?

[Ozy_Flame]

I think we can clearly see a rise in demand when COVID-related lockdowns begin to get lifted, and the world supply glut will ease once we need oil to ramp up normal operations across industry.

It is bad today, but I see something more stable by this time next year - assuming the world can recover from COVID with some level of stability.

[Bring_Back_Shantz]

Originally Posted by RichieRich

Might be silly to ask but how is it that different than trading gold or other commodities?

I can walk up to anyone selling gold, carry it home and put it in a cupboard.

Taking delivery of, and storing oil, is slightly more complicated, which is why right now, with such a glut, people are paying people to take it off their hands.

[you&me]

Originally Posted by Ozy_Flame

I think we can clearly see a rise in demand when COVID-related lockdowns begin to get lifted, and the world supply glut will ease once we need oil to ramp up normal operations across industry.

It is bad today, but I see something more stable by this time next year - assuming the world can recover from COVID with some level of stability.

Most of Calgary has been waiting for it to be better "next year" since about 2014...

[Ozy_Flame]

Originally Posted by you&me

Most of Calgary has been waiting it to be better "next year" since about 2014...

I think most reasonable Calgarians have come to accept the "new normal" is not what it was. COVID oil stunting may also create a "new normal" that we again have to adjust to.

[madmike]

Demand will come back to an extent. I think air travel is going to be down for quite a while. People are not going to fly unless they have to. Likely the same for cruises.

Cars should be ok as others have noted because people are going to avoid mass transit. In bigger cities, they can’t really deal with a significant increase in auto traffic due to congestion and lack of parking spaces so it will be interesting to see how it plays out. I think many companies will likely adopt more flexible working policies with more work from home becoming the norm.

[InglewoodFan]

Interesting article in Forbes about an ETF that looks to be the source of some of this distortion.

[OMG!WTF!]

Originally Posted by InglewoodFan

Interesting article in Forbes about an ETF that looks to be the source of some of this distortion.

Yikes. Comparing anything but especially oil to the old XIV is pretty scary.

My last friend in Oil and Gas is spending his days trying to find abandoned coal mines in Texas that will take oil fir $5/ barrel.

[InglewoodFan]

Originally Posted by OMG!WTF!

Yikes. Comparing anything but especially oil to the old XIV is pretty scary.

My last friend in Oil and Gas is spending his days trying to find abandoned coal mines in Texas that will take oil fir $5/ barrel.

I'm not familiar at all with XIV, do you have any good starting points to read up on it?

[OldDutch]

Originally Posted by accord1999

Cheap oil should do a great job of obliterating EV sales (which had already stagnated globally in 2019 thanks to Chinese withdrawal of EV subsidies).

You only worry about oil if you think cars won't be back after the lockdown is over; but the anecdotal evidence out of Wuhan is that likely cars will be stronger than ever as people are scared about the safety of mass transit. Without an effective vaccine, COVID is going to be crippling to mass transit in Canada, and will probably put most of the mass transit systems in the US into a death spiral.

What? The enviros on my Facebook page celebrating a deadly virus as a blessing from the David Suzuki Gods...are being short sighted? Sorry not buying it.

[OMG!WTF!]

Originally Posted by InglewoodFan

I'm not familiar at all with XIV, do you have any good starting points to read up on it?

I don't really understand it myself. But essentially the xiv was a derivative etn of the options exchange that tracked volatility in options trading in reverse to the vix which still functions today. As the vix went down the xiv went up. And that was the norm for a long period of time. Eventually volatility increased and the vix went way up causing the xiv to go down. As an etn the underlying securities of the xiv had to be adjusted every day to reflect its weighted value and when those values went down, the act of purchasing the opposite security to balance the books caused the derivative value to spiral downwards uncontrollably. Like a death sprial. A self fulfilling prophecy. Or like a suicide. A similar thing is happening now with the USO fund. Leveraged investors have to sell to cover positions in futures contracts. That selling drives down the value of their own security. I didn't know USO was derived like that. I thought it was a straight up oil fund.



About the xiv...


https://www.forbes.com/sites/jimcoll.../#1d2446443c38

[Ashasx]

what a tweet