The "free" oil is only for very short term contracts that are expiring this month (and you have to take delivery of the oil if you are holding the contract).
Longer term contracts are closer to normal, but still historically low.
Those guys forward sell their production as a hedge against just this kind of thing. The holder of the futures contract will be stuck without a chair when the music stops if they can't store it.
This is big. The last I heard, Democrats were trying to stop this move. Sounds like they failed.
They stopped it in the last recovery package when oil was at $12-15/bbl.
It will be harder for them to argue against essentially free oil.
The "free" oil is only for very short term contracts that are expiring this month (and you have to take delivery of the oil if you are holding the contract).
Longer term contracts are closer to normal, but still historically low.
This is true, but we have capacity in the reserve we can fill now, for the price of moving the oil in.
Expanding the reserve will happen later, on long term contracts.
We do, but it's not a lot more. Here's the current inventory, as of March:
https://www.spr.doe.gov/dir/dir.html
The capacity is currently 797 million barrels.
Trump announced yesterday that the SPR is offering this excess storage capacity, even without purchasing the oil.
Well the producers can choose. Pay 40 per barrel or you get to donate it for 0. Still a 40 cost saver.
Those guys forward sell their production as a hedge against just this kind of thing. The holder of the futures contract will be stuck without a chair when the music stops if they can't store it.
Um, today June crashed by half, too. Try to keep up.
Stop being an ass.
Are June contracts negative?
Thanks for the context. TDS has so unbalanced their minds, I wouldn't be surprised if they make some effort to stop it even now.
She'd be paying Iran and Saudi reparations for the racist low oil prices.
Many of us would be dead.
And the best part? The media would be completely sympathetic because of muh furst wahman President.