If I were Trump, I'd "bailout/stimulate" shale producers.

SunTrader · Mar 9, 2020

U.S. shale production boom came about because of U.S. shale producing companies ingenuity. That ain't changing anytime soon. If some more go under, others will replace them. Rinse, repeat.

Russia will blink. OPEC too.

bone · Mar 9, 2020

Sig said:
Does much Saudi oil make it to the gulf anymore anyway? Are there retooling issues with refineries to switch from WTI to sour crude? I just don't know as much as I'd like about the mechanics of all that, but from my naive view it seems like there's a few months buffer just in rearranging the current oil supply chain?

No, not really because Saudi crude is Sour (high sulfur content) and, as you suggest, requires more catalytic cracking capacity. And there's the tanker rates to contend with. But at a certain price inflection point it would certainly make its way there. Saudi oil finds its way to Europe and Asia mostly.

Sig · Mar 9, 2020

bone said:
No, not really because Saudi crude is Sour (high sulfur content) and, as you suggest, requires more catalytic cracking capacity. And there's the tanker rates to contend with. But at a certain price inflection point it would certainly make its way there. Saudi oil finds its way to Europe and Asia mostly.

So it's more of a minor speed bump then a real issue? Curious if anyone has taken a stab at quantifying the $/barrel amount required to overcome that hurdle.

bone · Mar 9, 2020

Yaaaaasss this is all about inserting Putin's nuts into a large vise. Aramco called up the European consumption desks within an hour of the conclusion of the OPEC meeting and offered cash spot Saudi crude immediately at a crazy severe discount to Brent and Russian stocks. Like $8 under spot market.

SunTrader said:
U.S. shale production boom came about because of U.S. shale producing companies ingenuity. That ain't changing anytime soon. If some more go under, others will replace them. Rinse, repeat.

Russia will blink. OPEC too.

Sig said:
So it's more of a minor speed bump then a real issue? Curious if anyone has taken a stab at quantifying the $/barrel amount required to overcome that hurdle.

R123 · Mar 10, 2020

bone said:
Yaaaaasss this is all about inserting Putin's nuts into a large vise

Yes and that is what concerns me, I would like to see the vice opened before real trouble could begin.

SunTrader · Mar 10, 2020

R123 said:
Yes and that is what concerns me, I would like to see the vice opened before real trouble could begin.

Same thing occurs to me at home with this CVirus. A little military episode overseas is always good for distracting the sheeple.

bone · Mar 10, 2020

No doubt that Putin is using this opportunity to squeeze US fracking. But these OPEC 'price wars' never pan out and they are never sustained - 1973 Arab Oil Embargo withstanding.

SunTrader · Mar 10, 2020

And for conspiracy fans there is the angle that it is our Pres with his nuts in a vice and Pal Putey coming to his rescue. Lower crude, lower at the pump more to spend on other essentials and non essentials.

Overnight · Mar 10, 2020

SunTrader said:
And for conspiracy fans there is the angle that it is our Pres with his nuts in a vice and Pal Putey coming to his rescue. Lower crude, lower at the pump more to spend on other essentials and non essentials.

Are you seeing lower prices at the pump? April delivery for RB is sitting at like $1.16 per gallon. After all the taxes, we should be seeing under 2 bux per gallon now. Anyone seeing that outside of Texas or South Carolina?

SunTrader · Mar 10, 2020

Overnight said:
Are you seeing lower prices at the pump? April delivery for RB is sitting at like $1.16 per gallon. After all the taxes, we should be seeing under 2 bux per gallon now. Anyone seeing that outside of Texas or South Carolina?

Getting there - $2.09