What Did You Buy Today?

[fenders53]

(03-14-2020, 12:04 PM)vbin Wrote:

(03-13-2020, 05:55 PM)fenders53 Wrote:

(03-13-2020, 05:44 PM)vbin Wrote:

(03-13-2020, 04:40 PM)fenders53 Wrote:

(03-13-2020, 04:28 PM)vbin Wrote: He played very well then becouse he just announced we will be buying oil for strategic reserve, they can keep buying a million barrel a day for next 2 years. That's wonderful.

Do some research on your math.  Tanks aren't that big and they are never anywhere near empty.  It will help this month though.  Better than a poke in the eye for sure.  Some more tanks would be good, but the US is always flush with oil so that may or may not make strategic sense.   

All that said it does help though, because when the Saudi discount takes affect in April we can't export oil profitably.  For now our oil has a buyer while OPEC and Russia come to their senses. (which I think they will)  Hopefully the frackers don't step up production tomorrow and unfix the remedy.  I'm not optimistic as they have loan payments.

U.S. has anywhere between 800 Million to a billion storage cap. Last time I checked we were close to 500 million. Now that doesn't mean that oil never gets used. So in a rough estimate you can see where it's going.

It might keep the 100 or so independent frackers and their local towns in business until after the election normally.  But we have a virus that is going to shut down the world according to many and cut demand several million barrels per day for many months.  If you fill the reserve and then release it back to the market, you are now competing with the same market in a few months and just taking up part of supply.  So I guess we'll watch oil prices and see if it raises prices $15+ so everyone is happy for more than a couple months.  The oil futures will let us know very soon what is reality.  It should spike up bigly if you are right.  We'll know in just a few days after they run the actual math.

Agree with you on demand. But on a contrary a lot of countries, India, China etc who import most of their oil will try to take advantage of this opportunity as well and fill up their reserve.so.we shall see.

SA is offering oil at a $4-7 discount from market prices starting in Apr.  That is oil in the 20s from current price.  Importing nations would be crazy to not fill their reserves.  Next time oil tries to run up $10 they can just buy less until is cheaper again.  This is why I think SA and Russia will get back to the table soon.  SA can break even around $10 oil, and be stubborn if they wish to, but it's their only real source of income.  They can send the US frackers to BK fast, but not in their national interest to give away oil for six months.  US can print money and keep the frackers solvent until the election.  I expect that will happen when the US strategic reserve fill is done in a few months.  Spiking unemployment before the election is highly undesirable.