$9.99 barrel oil?

[The_Rural_Juror]

Prelude to the $6.66 thread.

[phreezee]

[16hypen3sp]

What website is that quote from?

[M.alex]

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What website is that quote from?

https://twitter.com/AndreTilban

[Masked Bandit]

I'm probably one of the only people in Alberta that has never worked in O & G so can someone please ELI5, how the hell is A) WTI @ $13.xx and B) WCS @ $11.xx?

A) What the actual fuck?

B) I thought there was always a big spread between WTI & WCS?

[bigbadboss101]

https://www.cnn.com/business/markets/premarkets

$11.xx

[speedog]

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I'm probably one of the only people in Alberta that has never worked in O & G so can someone please ELI5, how the hell is A) WTI @ $13.xx and B) WCS @ $11.xx?

A) What the actual fuck?

B) I thought there was always a big spread between WTI & WCS?

Think it's West Texas Intermediate and Western Canada Select but I'm not an O&G person so I could be wrong. This is all a fight between major world players in the oil market and this would be the fallout as a result. In my pretty much uneducated opinion of course.

[The_Rural_Juror]

I saw something in the recycling bin of one of my cleans once that explains this perfectly. Allow me to attempt to ELI5. It is due to a timing difference of when the products are traded.

WCS price = WTI + WCS Differential

The WTI price used is the WTI price of today (April 20) for delivery in a future period (for today the first contract is for July delivery). This is quoted in an outright price (for example : $20)

The WCS differential is the WCS price for delivery in the current month (April) that was traded in the first month prior (March 1-15ish). However, because the April WCS trading window has been closed since March 16ish, the quote you see may be spot differentials (WCS traded on April 20 for April delivery). This is traded as a differential (for example : WTI - $15).

The net result of the above is WCS = $20 - $15 = $5.

[ExtraSlow]

There's no "law" that says WCS price has to move in parallel with WTI. We talk about that differential because it's simple, not because it's accurate.

[The_Rural_Juror]

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There's no "law" that says WCS price has to move in parallel with WTI. We talk about that differential because it's simple, not because it's accurate.

They don't. The timing difference assures that. But that is how WCS is traded (as a differential to WTI) according to the spiral bound Hilroy.

[ZenOps]

Title is not sensational enough. Needs to be "Free oil".

[Darkane]

Spot price is still $22-23, tomorrow when the may contracts expire it will drop like a stone - for real.

But, like @ExtraSlow says, we need a glorious drop to allow a recovery. Sticking around $25 will be far worse than a total crash.

Cheap oil absolutely DRIVES boom. In 2-5 years, let us all sit down for double lobster meat subs.

[pheoxs]

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Spot price is still $22-23, tomorrow when the may contracts expire it will drop like a stone - for real.

But, like @ExtraSlow says, we need a glorious drop to allow a recovery. Sticking around $25 will be far worse than a total crash.

Cheap oil absolutely DRIVES boom. In 2-5 years, let us all sit down for double lobster meat subs.

The problem is the shale oil industry can spin up wells way faster than any crash before.

If a oilsands project and a bunch of shale oil companies all go under the latter will pop back up much quicker once prices go up.

[ExtraSlow]

Companies with firm service transportation, unused storage, or hedges could make a killing if they can sell all three and shut in production. Hears SE sask has some crazy shit happening with pipeline contracts, I assume crazy shit is happening elsewhere too.

[ExtraSlow]

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The problem is the shale oil industry can spin up wells way faster than any crash before.

If a oilsands project and a bunch of shale oil companies all go under the latter will pop back up much quicker once prices go up.

Yep, true capacity destruction takes more than a few marginal producers gong bankrupt. Pressure pumpers going bankrupt would have a longer term impact, so I guess canadian should be hoping for US pumpers to go under?

[The_Rural_Juror]

$8.75

[Masked Bandit]

$7.69 right now.

What

The

Fuck???

[RX_EVOLV]

why is the June contract price not dropping (since this morning) when the May contract price is dropping like a rock. Is this people hoping/better things will be in better shape 30 days from now? is this a sign that when things do rebound it is going to bounce back hard?

[Disoblige]

A footlong is more expensive than a barrel of WTI soon...
Under $5 USD

[The_Rural_Juror]

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why is the June contract price not dropping (since this morning) when the May contract price is dropping like a rock. Is this people hoping/better things will be in better shape 30 days from now? is this a sign that when things do rebound it is going to bounce back hard?

Storage is probably full in May and not as full in June.