What happens with oil at 55 cents/barrel ?!?

Discussion in 'Oilfield Trucking Forum' started by Deadwood, Apr 20, 2020.

  1. Deadwood

    Deadwood Light Load Member

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    Dec 24, 2016
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    I haul crude oil at a large multi billion dollar midstream. The drivers are mostly 58-64 years old and have been hauling crude for 20+ years. Feel lucky to have been hired here as they don't hire frequently and turnover is practically non existent.

    When oil slipped from $40 to $20 there was a sharp drop off in our volume. I was told not to come in some nights as there was no oil. Then, all of a sudden, we started hauling for different producers who must have been hedged at a higher price because we were working overtime, 5 loads a night... go go go.

    What the hell happens with oil at 55 cents a barrel?!? No one can stay solvent at that price for long. I'm hearing that it's a one month occurrence because of tanker orders from Saudi Arabia but with spare holding capacity maxed out and demand killed off from the Wuhan Flu, $20 prices after May seems optimistic.

    The situation now feels like when the Roadrunner runs off a cliff and is hanging in mid air before looking down.
     
    Last edited: Apr 20, 2020
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  3. not4hire

    not4hire Road Train Member

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    Don't read too much into it. The current price is due to technical issues in the oil market; largely to do with futures contracts (May) that expire tomorrow. There will be a return to the more recent crappy prices. June's contracts are trading over $20.

    May's futures actually closed at -$37.63.
     
  4. x1Heavy

    x1Heavy Road Train Member

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    White County, Arkansas
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    Storage is out. Texas Crude is about 31 dollars to 57 dollars negative paying people to take it away.

    Storage is the big problem. May contracts closed for delivery stands at 100 million barrels. Each month until sept there is a total pending need for half a billion barrels of storage.

    Cushing is overflowing running down the sides. All the ship tankers bought up for stoarge. And the rest of physical storage has passed towards what they call Operational Max meaning they will NOT take anymore not a drop.

    Yes they will close for a while and go away. YOU go on unemployment for a while. The lost demand is related to America's lockdown on Covid so you will get your federal payment.

    Gas pricing? The stations will close first before they have to pay you to fill the fuel tank.
     
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