Crude oil prices close at negative $37.64!!😱😱😱

[golden eagle]

You read that right! The new contract for May closed at -37.64 per barrel, the first time oil had ever treaded into negative territory. Gas prices tend to rise and fall in correlation to oil prices. I don't expect gas to go below zero, but how low can it go? Too bad, there's not many places are open for a road trip.

[ozarkman417]

If gas prices for some reason were negative, then wouldn't the stations would just refuse to sell it to you, or close down? A store near me is currently selling regular at $1.16 a gallon.

[Max Rockatansky]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me. 

[nexus73]

"We will pay you to drive so long as you are driving a 1976 Cadillac in order to burn the most fuel possible!"...LOL!

Once again, truth is stranger than fiction.  As if negative interest rates were not crazy enough!

Rick

[Max Rockatansky]

"We will pay you to drive so long as you are driving a 1976 Cadillac in order to burn the most fuel possible!"...LOL!

Once again, truth is stranger than fiction.  As if negative interest rates were not crazy enough!

Rick

I miss being paid to drive, it was almost as though I was being paid to have fun.  Too bad I'm not making 60,000-80,000 mile runs a year like the old days.  All these quiet virus road networks would be an absolute blast and cheap to pay for to boot. 

[ozarkman417]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me.

But if you are not, or the scenic area is in a different part of the state, then any lodging or other overnight activity is practically impossible (in some states).

[Max Rockatansky]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me.

But if you are not, or the scenic area is in a different part of the state, then any lodging or other overnight activity is practically impossible (in some states).

The problem I've had is that I have done everything road wise I've wanted to within a six hour radius that doesn't have a winter closure.  Getting that far out and back in a single day is really tiring.  It's hard to find even a remote BLM campground that is open out in the boons much less non-urban hotels.  If camping was available I could definitely pull off about a week of off grid roads and hikes since I have all the equipment I need to cook for myself in addition to storing food. 

[1995hoo]

You read that right! The new contract for May closed at -37.64 per barrel, the first time oil had ever treaded into negative territory. Gas prices tend to rise and fall in correlation to oil prices. I don't expect gas to go below zero, but how low can it go? Too bad, there's not many places are open for a road trip.

Don't forget, though, it takes a while before gas prices drop in response to oil prices because the gas that's now in the stations' tanks was purchased based on higher oil prices. (Naturally, station owners are much more eager to raise prices as soon as oil prices rise than they are to lower them when oil prices drop, and the fact that people assume the price of oil directly correlates to the price of gas factors into why they do that.)

[Max Rockatansky]

I wonder, if some states and countries start reopening if it will start cause gas shortages?  I would have to imagine that scenario is not only possible but probably pretty likely in some major urban areas once they start to normalize.  That being the case the price of crude oil will probably have numerous sudden spikes when demand increases. 

[hotdogPi]

-$37.64!! = -$3.09×10²²
$(-37.64)!! = -$3.13×10^-21

note: x!! is not the same as (x!)!

[Roadgeekteen]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me.

But if you are not, or the scenic area is in a different part of the state, then any lodging or other overnight activity is practically impossible (in some states).

The problem I've had is that I have done everything road wise I've wanted to within a six hour radius that doesn't have a winter closure.  Getting that far out and back in a single day is really tiring.  It's hard to find even a remote BLM campground that is open out in the boons much less non-urban hotels.  If camping was available I could definitely pull off about a week of off grid roads and hikes since I have all the equipment I need to cook for myself in addition to storing food.

There are most definitely places within a couple of hours I would want to drive to but:
a: no license
b: I would need to pee, and I'm not sure what bathrooms are open

[Max Rockatansky]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me.

But if you are not, or the scenic area is in a different part of the state, then any lodging or other overnight activity is practically impossible (in some states).

The problem I've had is that I have done everything road wise I've wanted to within a six hour radius that doesn't have a winter closure.  Getting that far out and back in a single day is really tiring.  It's hard to find even a remote BLM campground that is open out in the boons much less non-urban hotels.  If camping was available I could definitely pull off about a week of off grid roads and hikes since I have all the equipment I need to cook for myself in addition to storing food.

There are most definitely places within a couple of hours I would want to drive to but:
a: no license
b: I would need to pee, and I'm not sure what bathrooms are open

The solution to B is easy, the side of the road or a bottle.  As long as you aren't the middle of some city usually that is a pretty easy issue to resolve.  Now the "other"  bodily function can be far more tricky, especially if it's an emergency.  Nonetheless camping wipes, some toilet paper, soap, water, and some plastic bags in your trunk at all times are good things to have for that "oh ${*{!"  Moment that happens to most of eventually but almost is never anticipated. 

[ozarkman417]

Most states seem cool with letting people go for drives.  So if you're in a state with mountains or scenic drives it sounds like an invitation to me.

But if you are not, or the scenic area is in a different part of the state, then any lodging or other overnight activity is practically impossible (in some states).

The problem I've had is that I have done everything road wise I've wanted to within a six hour radius that doesn't have a winter closure.  Getting that far out and back in a single day is really tiring.  It's hard to find even a remote BLM campground that is open out in the boons much less non-urban hotels.  If camping was available I could definitely pull off about a week of off grid roads and hikes since I have all the equipment I need to cook for myself in addition to storing food.

There are most definitely places within a couple of hours I would want to drive to but:
a: no license
b: I would need to pee, and I'm not sure what bathrooms are open

Part A: I too do not have my license. However, I have all requirements completed except the actual test (which I can't do due to COVID-19). Given this, I do wonder how much trouble they are going to give me if something happens. Only way you are going to get caught is if something happens that involves you and the police.
Part B: Well, If you are going to pee on the side of a road, make sure its not a major one.

[golden eagle]

I wonder, if some states and countries start reopening if it will start cause gas shortages?  I would have to imagine that scenario is not only possible but probably pretty likely in some major urban areas once they start to normalize.  That being the case the price of crude oil will probably have numerous sudden spikes when demand increases.

As far as a shortage, I doubt it. There's way too much oil out there. That's one the main catalysts for the price collapse. The strategic reserve in Oklahoma is full. I don't think the economy will come back in one Big Bang, so I do believe the market can absorb a rolling reopening.

[Max Rockatansky]

I wonder, if some states and countries start reopening if it will start cause gas shortages?  I would have to imagine that scenario is not only possible but probably pretty likely in some major urban areas once they start to normalize.  That being the case the price of crude oil will probably have numerous sudden spikes when demand increases.

As far as a shortage, I doubt it. There's way too much oil out there. That's one the main catalysts for the price collapse. The strategic reserve in Oklahoma is full. I don't think the economy will come back in one Big Bang, so I do believe the market can absorb a rolling reopening.

I'm talking about if production slows due to the low demand.  If that happens will there be enough supply on tap to feed sudden surges in demand?  Given what I've seen during some natural disasters I can't see that going buttery smooth in the short term.  Yeah capacity will ramp back up eventually but there could be some lines at the pump in some communities. 

[mgk920]

If gas prices for some reason were negative, then wouldn't the stations would just refuse to sell it to you, or close down? A store near me is currently selling regular at $1.16 a gallon.

Around here (Appleton, WI) it has been stable at $0.959 for over a week now.  I figure that that is about the practical 'floor' for a retail fuel price in that the stations have sets of fixed and recurring bills that have to be paid, transportation of the fuel has minimum fixed costs, the refinery has recurring costs that have to be covered and the fixed dollars per unit volume highway fuel tax is now about 60-65% of that retail price - even if the price of the crude oil on the commodities market was zero or even 'negative'.



Mike

[US71]

I wonder, if some states and countries start reopening if it will start cause gas shortages?  I would have to imagine that scenario is not only possible but probably pretty likely in some major urban areas once they start to normalize.  That being the case the price of crude oil will probably have numerous sudden spikes when demand increases. 

It's time for another Deepwater Horizon accident /sarc

[Max Rockatansky]

I wonder, if some states and countries start reopening if it will start cause gas shortages?  I would have to imagine that scenario is not only possible but probably pretty likely in some major urban areas once they start to normalize.  That being the case the price of crude oil will probably have numerous sudden spikes when demand increases. 

It's time for another Deepwater Horizon accident /sarc

We're Sorry....

[Scott5114]

I don't know enough about how oil futures work to say for sure, but a lot of times negative numbers in financial contexts aren't actually meant to be a concrete amount of real money.

For example, one of my wife's coworkers likes to joke that he has a car with a negative value. The typical Blue Book value for a car of that model year and with that mileage is $300. However, it is in poorer condition than average for that year, which reduces its value by $200. It also doesn't have air conditioning, which tends to reduce the sale price of a car of that year by an additional $200. So his car has a Blue Book value of —$100.

Does that mean he has to pay someone $100 to get rid of his car? No. He could always sell it for scrap metal value. But it still runs, and the joke of having to pay someone $100 to sell the car.

[wxfree]

I don't know enough about how oil futures work to say for sure, but a lot of times negative numbers in financial contexts aren't actually meant to be a concrete amount of real money.

For example, one of my wife's coworkers likes to joke that he has a car with a negative value. The typical Blue Book value for a car of that model year and with that mileage is $300. However, it is in poorer condition than average for that year, which reduces its value by $200. It also doesn't have air conditioning, which tends to reduce the sale price of a car of that year by an additional $200. So his car has a Blue Book value of —$100.

Does that mean he has to pay someone $100 to get rid of his car? No. He could always sell it for scrap metal value. But it still runs, and the joke of having to pay someone $100 to sell the car.

In this case, there's money moving from seller to buyer.  The contract trading is about to expire, and these contracts are settled physically, by oil being delivered.  Anyone not wanting to take possession of a thousand barrels of crude oil, and not wanting to pay someone to hold it, has to unload the contract, even if it's in negative dollars (paying someone to take the oil).

[SEWIGuy]

Right.  This has almost everything to do with buyers not being able to store the oil they are contracted to buy.  Don't get me wrong, it's not a good thing, but it's not the end of the world.

[Chris]

Around here (Appleton, WI) it has been stable at $0.959 for over a week now.  I figure that that is about the practical 'floor' for a retail fuel price in that the stations have sets of fixed and recurring bills that have to be paid, transportation of the fuel has minimum fixed costs, the refinery has recurring costs that have to be covered and the fixed dollars per unit volume highway fuel tax is now about 60-65% of that retail price - even if the price of the crude oil on the commodities market was zero or even 'negative'.

The current fuel price in the Netherlands is still around $ 5.75 per gallon. Yes you read that right. It may be the highest in the world right now, usually Norway takes the top spot but their currency has devaluated significantly (Norway is also an oil producing country).

$ 5.75 per gallon is the lowest it has been in about 10 years. But the fuel taxes are so high that the fuel prices can't drop as much as in other countries. Also, the Netherlands is not in a dictatorial lockdown, so while traffic volumes have fallen significantly, they have not fallen to the levels seen in some other countries. Traffic volumes are down by 30-40%, not 80-90% as in Spain, France, Italy, etc.