2020 Potential Economic Collapse

[preppergb]

This downturn is crippling the American Shale oil industry who need at least $55 a barrel to make it viable.

[jansman]

It sounds like a price war to me, if they pay people to take USA oil, then the demand for russian or middle east oil drops. Its a dangerous game with a possible real war brewing

It is a combination of over supply and lack of demand.Neither the Saudis,Yanks or Russians would back down on production.The Saudis wanted to cut production,to keep the price up,the other two didn't.Chuck in The Global Lockdown and nobody manufacturing/ travelling/ freighting,and you have the classic supply/ demand scenario.Also,it isnt that easy to turn the tap off on oil wells,as pumping pressure has to be maintained,especially the nearly played out Texan wells ,where they ( and the Saudis too) pump in water to get the last dregs.

This will be an interesting one to watch.

[Arzosah]

Also,it isnt that easy to turn the tap off on oil wells,as pumping pressure has to be maintained,especially the nearly played out Texan wells ,where they ( and the Saudis too) pump in water to get the last dregs.

This will be an interesting one to watch.

Ah, that makes sense of why they seem to be just carrying on regardless. I wonder, if this carries on for even a month longer, if those wells will just close and not reopen?

[Arwen Thebard]

Foremost its an indicator of just how deep and severe the global shutdown has impacted on the real economies. Watch bond prices to follow suit.

[Arwen Thebard]

It sounds like a price war to me, if they pay people to take USA oil, then the demand for russian or middle east oil drops. Its a dangerous game with a possible real war brewing

Sadly history agrees with you. Low oil prices make war cheap.

[jansman]

It sounds like a price war to me, if they pay people to take USA oil, then the demand for russian or middle east oil drops. Its a dangerous game with a possible real war brewing

Sadly history agrees with you. Low oil prices make war cheap.

People will be too hungry to fight. The first thing folks ran to, and still are; GRUB. food, scran. That is where you need to be.

[grenfell]

Seems storage is full too and they/we are runnig out of places to put it.

That seems to be the key, the story is all over the place this morning.

From what i have read further there are several facets to this problem , not unlike most problems not being black and white. Over roduction , a fall in consumption and running out of places to put the oil all play a part but then evidently so does the futures market. I won't pretend to fully understand it but it's basically buying and selling contracts glorified gambling or crystal ball gazing for want of a better description. https://en.m.wikipedia.org/wiki/Futures_exchange
Put another way there appears to be no or very little actual physical movement or selling of oil . I don't think we'll be getting a cash payout when we fill the car up just yet . Petrol is still largely above a pound a litre although i did see it at 99.9p at one place last week.

[omega man]

Seems storage is full too and they/we are runnig out of places to put it.

That seems to be the key, the story is all over the place this morning.

From what i have read further there are several facets to this problem , not unlike most problems not being black and white. Over roduction , a fall in consumption and running out of places to put the oil all play a part but then evidently so does the futures market. I won't pretend to fully understand it but it's basically buying and selling contracts glorified gambling or crystal ball gazing for want of a better description. https://en.m.wikipedia.org/wiki/Futures_exchange
Put another way there appears to be no or very little actual physical movement or selling of oil . I don't think we'll be getting a cash payout when we fill the car up just yet . Petrol is still largely above a pound a litre although i did see it at 99.9p at one place last week.

I did read somewhere yesterday that only 12p a litre is for the physical oil/refinement- the rest being various taxes etc...
OM

[ForgeCorvus]

From what i have read further there are several facets to this problem , not unlike most problems not being black and white. Over roduction , a fall in consumption and running out of places to put the oil all play a part but then evidently so does the futures market. I won't pretend to fully understand it but it's basically buying and selling contracts glorified gambling or crystal ball gazing for want of a better description. https://en.m.wikipedia.org/wiki/Futures_exchange

So, the only people getting shafted are the 'money men' ?
Sounds like a result to me

[grenfell]

So, the only people getting shafted are the 'money men' ?
Sounds like a result to me

Certainly taking a hit , my heart bleeds for them honest , but the so and so's will no doubt try to spread the hurt...