Taxi Driver Online

Never happened in the history of the oil industry before

The price of US oil has turned negative for the first time in history.
That means oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May.
Demand for oil has all but dried up as lockdowns across the world have kept people inside.
As a result, oil firms have resorted to renting tankers to store the surplus supply and that has forced the price of US oil into negative territory.
The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, fell as low as minus $37.63 a barrel.

The severe drop on Monday was driven in part by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on Tuesday. Traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.

In the United States and elsewhere, oil-producing businesses have made commercial decisions to cut output. But still the world has more crude oil than it can use.

And it's not just about whether we can use it. It's also about whether we can store it until the lockdowns are eased enough to generate some additional demand for oil products.

It isn't rocket science STOP PRODUCTION at least for a month or two

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Incredible really, and one suspects a lot of future traders have done their nuts.

Be nice to see some of it reflected at the pumps in the weeks to come.

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IDFIMH

It was only a temporary dip due to traders having to end their accounts. It went back up today and on the news they said it would have no real effect on pump prices.

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Grandad,

prices are still very low and we are not getting the benefit although i suspect that refining oil is becoming very unprofitable at the moment due to the lack of the economies of scale

Can't refine it and store it for long because it goes off

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Certainly no sign of that yet, in fact I think the only branded outlet in Dundee city centre has gone up over the past wee while. However, the only other branded outlet in central Dundee (they're both Shell) shut down soon after lockdown, and in fact the whole place is now boarded up and the entrances blocked off. So the remaining Shell outlet is basically the only one in central Dundee now apart from Tesco, so less competitive impetus to reduce prices



https://www.eveningtelegraph.co.uk/fp/d ... -pandemic/

Of course, the lack of demand at the pumps may also be a factor pushing prices up to end-users rather than fuelling* a price war - I know the chap who manages the main outlet (Shell) in central St Andrews, and I think he said demand was 80% down on usual levels (the only other fuel outlet in town is Morrison's, but it's on the outskirts).

*See what I did there?

interesting ours have all stayed open But they do all have shops attached

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

In fairness, even if the filling stations wanted to give the stuff away for zero - theyd still have to charge 58p per litre in tax

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

PLUS VAT

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

The one in Dundee that closed had the usual overpriced snacks and sandwiches - and in fact that's where they make their money these days, I think - profit margins from selling fuel aren't good, despite the prices.

But maybe that was the problem - they'd have been making money on selling snacks to pub and club goers, taxi drivers and students late at night, but obviously that's largely disappeared now.

And my Shell pal tells me that it was a small indepedent franchisee, and simply couldn't afford to absorb the losses, so shut up shop (literally) fairly quickly. He works for a nationwide franchisee with a shedload of outlets, and have obviously decided it's better in the longer-term to stay open.

And the filling stations that Shell run themselves will no doubt stay open. I would imagine all the fuel brands are in a similar position, and even if the supermarket pumps are making less money than usual they'll be effectively subsided by the cash their stores are making


And with oil prices likely to stay low for the forseeable future (and they were well down even before this all kicked off), an obvious target for tax rises when things start to settle down again.

After all, all these grants and furlough payments will have to be paid for somehow

As for fuel, it's hardly an issue, if i used the fuel I presently have in my vehicles at the rate im presently using it at I'd not need to fill up again for at least another year....which is real bummer as the stuff is gloriously cheap.

It's like giving a bald man a hairbrush. Give me cheap fuel when I can use it.

Give me the Hairbrush - I look like Grizzly Adams, but Hairier!

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Chris The Fish

http://www.youtube.com/watch?v=Gdlyi5mc ... re=related

It's all that sea air puts hairs on your face !!

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Down here diesel hasn't really changed price for three weeks.

It's the lowest price it's been for years but I think it should have fallen a bit more.

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IDFIMH

Yes, I suspect petrol and diesel prices would have fallen further if we hadn't been in lockdown.

But if we hadn't been in lockdown oil prices wouldn't have gone so low either.

But, as I said, it's all bets off as regards normal pricing at the pumps, which is probably why prices haven't fallen since about the start of the lockdown