Hey Oil Barons.......

[Angry Gorilla 1769]

It's the Shanghai lockdown that's pushing prices down right?

[Tex48 840]

6 hours ago, BTW said:

$13 move down in two trading days ... does the market think OPEC is gonna open the tap?  Is all this from the Chinese lockdowns?

It's Chinese lockdown noise. They are going into the deepest lockdowns they've had in the last 2 years.  I think the drop in demand is going to be less than people think.

[Storm the Field 5304]

Probably that + Ukraine headlines, although I'd note most of today's selloff dissipated. Only closed down 90 cents at $105, which is just $8 shy of where we closed last week. Saw an article that said the situation in Shanghai is reducing demand by upwards of 200K barrels/day.

I said it before but when oil shoots higher by $40 over the span of two months, you shouldn't be surprised by the occasional headline-driven $10-15 dives. This won't be the last rollercoaster stretch. I foresee a lot of time spent bouncing up and down in the $95-120 range in the near term.

[Armybrat 40940]

Same old shit....

https://www.houstonchronicle.com/business/energy/article/Biden-goes-after-tax-breaks-for-oil-again-17034266.php

[Cajun 11754]

Pain can be a great teacher Brat.

[Armybrat 40940]

Pain in the ass for sure.

[Guest]

17 hours ago, Armybrat said:

Same old shit....

https://www.houstonchronicle.com/business/energy/article/Biden-goes-after-tax-breaks-for-oil-again-17034266.php

He is utterly clueless. 

[Storm the Field 5304]

17 hours ago, Armybrat said:

Same old shit....

https://www.houstonchronicle.com/business/energy/article/Biden-goes-after-tax-breaks-for-oil-again-17034266.php

This must be the first time in history a President issued a proposed budget with a bunch of red meat for his base that has no chance of actually becoming law.

[Guest]

11 minutes ago, Storm the Field said:

This must be the first time in history a President issued a proposed budget with a bunch of red meat for his base that has no chance of actually becoming law.

I know what he’s doing and so do you. Normally I’d roll my eyes and I am here, but with commentary, because he and his idiot press secretary VERY recently have been begging for more domestic production and have been critical of industry for not simply turning on the spigot to help Californians and New Yorkers with gasoline prices. He chooses NOW to mouth off about this shit?  The irony and lack of self-awareness is stunning. 

[52-80 19271]

On 3/29/2022 at 3:29 PM, BTW said:

$13 move down in two trading days ... does the market think OPEC is gonna open the tap?  Is all this from the Chinese lockdowns?

For the trading price to reflect economic realities you gotta smooth the fuck out of the curve with a 10 pass filter. 
 

Short term its commodity trading funds (CTA) and other speculators throwing spitballs into the supply/demand dynamics. 

[babysdaddy 2728]

[babysdaddy 2728]

So we are going to blow 1/4 of our strategic reserves with the goal to bring down gas prices until right after midterms?

[Guest]

9 minutes ago, babysdaddy said:

So we are going to blow 1/4 of our strategic reserves with the goal to bring down gas prices until right after midterms?

He’s REALLY lucky he’s following Trump. his stupidity is astounding. 

[Okie State 3848]

He probably has a whole team of dumbfucks helping him make these decisions.

[52-80 19271]

Buy the dip

[Guest]

58 minutes ago, 52-80 said:

Buy the dip

It’s certainly worked recently. I’d understand Biden’s announcement if he didn’t do anything. Temporary relief for an announced deal that never comes to fruition would make sense. But he’s dumb enough to do it and he doesn’t understand it’ll have very harmful long term impact on price (opposite of what he wants) and weaken our SPR with a lot of geopolitical shit going down. All the while, DISCOURAGING domestic investment with his threat of removing tax breaks. All his actions point to exacerbating the inevitable, continued upward trend in prices.  He’s a contradictory buffoon. 

[Cajun 11754]

22 hours ago, babysdaddy said:

So we are going to blow 1/4 of our strategic reserves with the goal to bring down gas prices until right after midterms?

That is exactly the plan.  They don’t even try to hide it anymore.

Dumbest dumbfucks that ever dumbfucked.

[tequila 319]

Strategic Popularity Reserves.

Doubtful it works.

From Trafigura this AM on Bloomberg or the myth of a million barrels a day from the SPR
The logistics have never been tested to pump a million barrels a day from the SPR - max has been 500,000 day.
The Jones Act requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by United States citizens or permanent residents. Due to limited ships that qualify, few barrels will go to the US refiners.
The re-configuration of shipping could increase the price of crude delivered to the US.
You’re sending a signal to producers that by releasing the oil we’re bringing prices down and that’s going to dis-incentivize that investment that we need.


Sent from my iPhone using Tapatalk

[Armybrat 40940]

How much per barrel did it cost to fill up those strategic reserves in the first place? 
And how much is it going to cost to refill it in the next few years?

I also wonder what the Defense Department thinks about having to rely on a depleted reserve at a time when the geopolitical. situation is extremely dangerous?

[The Royal We 3072]

The SPR releases are total horseshit and won't do anything except likely force us to refill the SPR at even higher prices.

The Jones Act is a POS law that needs to be thrown in the trash too, but that's another conversation altogether. 

It's very disappointing (but not surprising) that our industry is being used as a political football at a time when we should be flexing our energy muscles to help bring more stability to the world while at the same time creating more high paying jobs here at home.  Fucking depressing and why we can't have nice things.

[TxTower 652]

https://finance.yahoo.com/news/biden-oil-relief-plan-seen-194900986.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAI77BYvociBlv9KWIE3zy8ZYl_3QD6bCb7PFIe84LxQcDXxp0_4rByrr3CWibII_Vyphb7fN79JirvNIioJNwYFpBJyqjhGLp3VoxgnKDt8ZkIcRZdxXJOlAjSRE_4r1wZChfVVWwiQSFTQLURM0zq2iZplV7fNud0Y4ZNORdpya


Sent from my iPhone using Tapatalk

[Cajun 11754]

6 hours ago, Armybrat said:

How much per barrel did it cost to fill up those strategic reserves in the first place? 
And how much is it going to cost to refill it in the next few years?

I also wonder what the Defense Department thinks about having to rely on a depleted reserve at a time when the geopolitical. situation is extremely dangerous?

I believe Orange man filled up the reserves when the prices were in the $20s

[Guest Lobo]

U.S. Logistics policy to top-off SPR:

https://econ.video/2017/08/31/super-troopers-free-hot-dog/

[Guest]

17 minutes ago, Cajun said:

I believe Orange man filled up the reserves when the prices were in the $20s

Can’t remember but that was idiotic too. Biden’s release is a lot more sensible in that regard, but not with an active aggressor in the world that happens to have nukes. 

[The Royal We 3072]

What the orange man says is not always what the orange man actually did.

https://www.factcheck.org/2022/04/strategic-petroleum-reserve-oil-stocks-declined-under-trump-contrary-to-his-claim/

Quote

When Donald Trump took office as president in January 2017, the reserve held 695.1 million barrels of crude oil. The last full week before he left office in January 2021, it held 638.1 million barrels, or about 8% less.

In his defense, he tried to refill it when prices were in the $30s, but of course it was blocked and Democrats shrieked that it was a bailout.  This actually makes sense to me, we should have been building additional storage and buying everything we could get our hands on when oil was <$40, but again, we can't have nice things.

Quote

Trump did propose buying an additional 77 million barrels of oil to add to the reserve in March 2020. But the funding for the proposal, which was to be included as part of a COVID-19 stimulus package, was blocked by congressional Democrats, who called it a “$3 billion bailout” for the oil industry.

 

[Cajun 11754]

@The Royal WeI didn’t say he said it.  That was just my recollection in trying to answer Brat’s question.
 

But, yes, now I remember how happy Schumer was about blocking what orange man wanted to do at very low prices.  
 

Down right giddy.

[Fudge Nuggets 19229]

I like how the regulars here say this is dumb but it was absolute crickets when Trump authorized a release after the KSA refinery got blowed up by the Iranians in Sept 2019.  I went back in the thread to that week and absolutely fuck all was said about the release except one post by Trey.

Color me surprised.

 

[jeevsie 3740]

So you’re saying a release to counteract an event is the same as a release to counteract market conditions with no foreseeable market change coming?

[Cajun 11754]

That is, in fact, what he’s saying.

 

[52-80 19271]

19 hours ago, Armybrat said:

How much per barrel did it cost to fill up those strategic reserves in the first place? 
And how much is it going to cost to refill it in the next few years?

I also wonder what the Defense Department thinks about having to rely on a depleted reserve at a time when the geopolitical. situation is extremely dangerous?

Current stock has blended price <$30. 

if they are depleting 1mbbl per day, future replacement cost at current price difference will “cost” $70 million per day. 

[52-80 19271]

DEA website showing inventory is down. I think we’re about 100mbbl below max capacity, which was held for most of last decade. 

To get back there would cost $7 billion dollars. 
 

call me crazy but the “strategic” reserve should be for domestic emergencies, not for political relief

[Fudge Nuggets 19229]

7 hours ago, Cajun said:

That is, in fact, what he’s saying.

 

And that you are all a bunch of jackass hypocrites.  You left out the most important part. 

[Armybrat 40940]

3 hours ago, 52-80 said:

DEA website showing inventory is down. I think we’re about 100mbbl below max capacity, which was held for most of last decade. 

To get back there would cost $7 billion dollars. 
 

call me crazy but the “strategic” reserve should be for domestic emergencies, not for political relief

IIRC, that is what it was created for.... that and the military.

[Neonmoon 38130]

3 hours ago, 52-80 said:

DEA website showing inventory is down. I think we’re about 100mbbl below max capacity, which was held for most of last decade. 

To get back there would cost $7 billion dollars. 
 

call me crazy but the “strategic” reserve should be for domestic emergencies, not for political relief

As always, it depends on one’s definition of emergency 

The SPR was created in 1975 after the OPEC Oil Embargo to mitigate future supply issues. One could argue there is a domestic emergency about oil supply and thus high oil prices. I personally don’t agree with the release, but it’s definitely in the realm as why the SPR was created in the first place. 
 

[Guest]

13 hours ago, Fudge Nuggets said:

I like how the regulars here say this is dumb but it was absolute crickets when Trump authorized a release after the KSA refinery got blowed up by the Iranians in Sept 2019.  I went back in the thread to that week and absolutely fuck all was said about the release except one post by Trey.

Color me surprised.

 

I did. My posts were nuked as Dr. Beeper (at my request). 

12 hours ago, jeevsie said:

So you’re saying a release to counteract an event is the same as a release to counteract market conditions with no foreseeable market change coming?

He wades in here from time to time to shit all over the place. In my mind, though, both were/are insanely dumb releases that are purely political and self-preserving in nature. 

1 hour ago, Neonmoon said:

As always, it depends on one’s definition of emergency 

The SPR was created in 1975 after the OPEC Oil Embargo to mitigate future supply issues. One could argue there is a domestic emergency about oil supply and thus high oil prices. I personally don’t agree with the release, but it’s definitely in the realm as why the SPR was created in the first place. 
 

Anyone who would argue that is an idiot. 

[Cajun 11754]

3 hours ago, Fudge Nuggets said:

And that you are all a bunch of jackass hypocrites.  You left out the most important part. 

Wait.

Is this the thing?  That we know?

[Guest]

2 minutes ago, 52-80 said:

big brain move by poca to practically beg for 200$ oil so she can scream murder again

 

 

 

Goddamnit she makes my blood boil. She is terrible (and should be beaten convincingly). 

[Cajun 11754]

I would say something about a “box of hammers”, but I don’t want to insult boxes of hammers.

[Guest Lobo]

Wait until she finds out how much those banks invested in the manufacturers of gas-guzzling SUV's made right here in the America.  My god, what if they're also behind financing the asphalt on the roads we keep building to accommodate such vehicles using such fossil fuels?  

Good lord, she may even figure out these same banks help fill in the capital stack and market making for the stocks of the defense contractors currently deploying weapon systems into active theaters on three continents?  This could go all the way to the top!  

I get she has to appear concerned, but that's not the only thing those banks are up to.  For instance, Wells Fargo is currently pissing me the fuck off with regard to my HELOC and I guess I'll threaten to accuse them of war crimes 'cause they have a customer service problem.  Unless the customer is made up, in which case---it's all good.

[Guest]

25 minutes ago, Lobo said:

Wait until she finds out how much those banks invested in the manufacturers of gas-guzzling SUV's made right here in the America.  My god, what if they're also behind financing the asphalt on the roads we keep building to accommodate such vehicles using such fossil fuels?  

Good lord, she may even figure out these same banks help fill in the capital stack and market making for the stocks of the defense contractors currently deploying weapon systems into active theaters on three continents?  This could go all the way to the top!  

I get she has to appear concerned, but that's not the only thing those banks are up to.  For instance, Wells Fargo is currently pissing me the fuck off with regard to my HELOC and I guess I'll threaten to accuse them of war crimes 'cause they have a customer service problem.  Unless the customer is made up, in which case---it's all good.

US money center banks are split. Wells and BofA have largely abandoned the space. JPM and Citi have not. I don’t know how anyone can take her seriously. Without bank capital, our production plummets. If that happens, $200 oil is the least of our concerns. I thought the head of her party was releasing SPR reserves, with his press secretary bitching how we aren’t producing enough and that it’s our fault?  That doesn’t much matter I guess; Pocahontas gets her populist bullet points out, and tries to rile up Jamie Dimon once more. 

She is a walking contradiction and ultra political. She is everything wrong with politics. 

[Guest Lobo]

IIRC, it was a Congressional hearing, not Treasury around 2015 or so.  I can't remember the Congresswoman, but she had Jamie, et. al. up there and she was grilling them about unfair student lending or maybe it was debt forgiveness for college loans.  And one by one, they all lean forward and say, "We got exited those lending lines in 200x" Years before the hearing was taking place.  And she played it off well but you tell she had no fucking idea and some staffer likely got fired the next day.  She reminded me of the Senator (as Sec. Warren will by the end of the day when she gets all her capital stack facts for myriad industries) in "The Godfather II" when Frank changes his testimony.  He's not the Senator that they setup, but the Chairman in the glasses and bald head and he starts shuffling papers and screams into the microphone, "We're gonna find out what the hell's going on here!"  

Anyway, Sec. Warren would also do well to investigate the market making some of these banks engage in when facilitating buy/sale/options orders for sitting U.S. Congressman and cabinet members.  Not only do they offer investment lines and credit lines to energy companies, they also power the trading platforms the people on your left and right use to make trades after these "hearings" are done with for the day.  Don't allow Citi to invest in E&P tomorrow, by Wednesday...they'll be the biggest single-issue trading platform for energy stocks.  Because like Pesci in "Casino", they just keep coming back.  /rant

I get the red meat she was trying to throw, but she's no dummy.  She could have done it more intelligently and accurately.  Plus, just not great timing Liz with the geopolitical landscape. 

[Guest]

44 minutes ago, Lobo said:

IIRC, it was a Congressional hearing, not Treasury around 2015 or so.  I can't remember the Congresswoman, but she had Jamie, et. al. up there and she was grilling them about unfair student lending or maybe it was debt forgiveness for college loans.  And one by one, they all lean forward and say, "We got exited those lending lines in 200x" Years before the hearing was taking place.  And she played it off well but you tell she had no fucking idea and some staffer likely got fired the next day.  She reminded me of the Senator (as Sec. Warren will by the end of the day when she gets all her capital stack facts for myriad industries) in "The Godfather II" when Frank changes his testimony.  He's not the Senator that they setup, but the Chairman in the glasses and bald head and he starts shuffling papers and screams into the microphone, "We're gonna find out what the hell's going on here!"  

Anyway, Sec. Warren would also do well to investigate the market making some of these banks engage in when facilitating buy/sale/options orders for sitting U.S. Congressman and cabinet members.  Not only do they offer investment lines and credit lines to energy companies, they also power the trading platforms the people on your left and right use to make trades after these "hearings" are done with for the day.  Don't allow Citi to invest in E&P tomorrow, by Wednesday...they'll be the biggest single-issue trading platform for energy stocks.  Because like Pesci in "Casino", they just keep coming back.  /rant

I get the red meat she was trying to throw, but she's no dummy.  She could have done it more intelligently and accurately.  Plus, just not great timing Liz with the geopolitical landscape. 

She thinks she’s a lot smarter than she really is. Dimon is getting the gist of how to treat her:

“No”. 

“Right now….”

”No”.

 

[deadshank 24653]

[BTW 370]

We are living in a simulation:

Quote

New York Governor Kathy Hochul will soon release a budget that likely will include a plan to make New York the first state to ban natural gas and other fossil fuels in new construction, according to Food & Water Watch and other environmental groups.

https://www.usnews.com/news/us/articles/2022-04-04/new-york-set-to-ban-natural-gas-in-new-buildings-environmental-groups#:~:text=April 4%2C 2022%2C at 2%3A02 p.m.&text=(Reuters) -New York Governor,Watch and other environmental groups.

 

[Guest Lobo]

Article doesn't really specify, like no fossil fuels in the materials?  Or no fossil fuels in the actual construction process?  You could probably do that for a small residential single-family home.  Shit, we're almost there here in Austin.  But how would that work on a commercial site?  How do they haul off the Earth to put down the foundation?  There are no battery powered earth movers or trucks that can excavate and transport away that much rock/soil.  Like a new ground-up build in Manhattan from a demo'd site...how do they haul off the demo material?  A fleet of Chevy Volts from Baffin Bay to Midtown?  

[The Royal We 3072]

5 minutes ago, Lobo said:

Article doesn't really specify, like no fossil fuels in the materials?  Or no fossil fuels in the actual construction process?  You could probably do that for a small residential single-family home.  Shit, we're almost there here in Austin.  But how would that work on a commercial site?  How do they haul off the Earth to put down the foundation?  There are no battery powered earth movers or trucks that can excavate and transport away that much rock/soil.  Like a new ground-up build in Manhattan from a demo'd site...how do they haul off the demo material?  A fleet of Chevy Volts from Baffin Bay to Midtown?  

The way I read the article is all heating will have to be electric, no gas fired furnaces allowed for keeping buildings warm.  Where do they think the electricity is going to come from? 

As someone who lives in the sticks and has to use electricity to heat my house in the winter, let me tell you how expensive that can get.  I'd spend quite a bit of money to run nat gas to my house if it was an option.

[Blotto 23585]

On 4/2/2022 at 4:20 AM, 52-80 said:

Current stock has blended price <$30. 

if they are depleting 1mbbl per day, future replacement cost at current price difference will “cost” $70 million per day. 

I don't know how up to date this site is, but it shows $27.30 as average cost. 

https://www.energy.gov/fecm/strategic-petroleum-reserve-9

Help a dumbass on the subject of strategic oil reserve (me) out. How is the release actually orchestrated? in other words, is it typically refineries that purchase the oil and if so, how is the price determined? I'm inclined to agree that this is a short sighted political stunt, I just cant find a lot of information on who benefits in the process. I have seen references to the oil being auctioned off, but in the case of the november 21 releases, it seems like the oil was delivered with a promise that the oil is returned by a future date. 

https://www.reuters.com/markets/commodities/us-sell-32-mln-bbls-mostly-sour-crude-4-spr-sites-2021-11-25/

Quote

 

In the first auction of the coordinated release, about 10 million barrels will be made available from Big Hill and Bryan Mound in Texas, about 7 million barrels from West Hackberry in Louisiana and another 5 million barrels from Bayou Choctaw in Louisiana, the DOE said on its website.

Deliveries will take place January through April 2022, with early deliveries accepted in late December, it added.

Buyers will have to return the oil at later dates between 2022 and 2024, the DOE said.

 

So according to that description, its more of a swap and the government pushes the replacement cost risk to the refineries? Obviously if oil is $40 in 2024, this works out well for the buyers. If oil is at $200, not so much. 

[fattyflattie 4638]

23 minutes ago, The Royal We said:

Where do they think the electricity is going to come from? 

Lightning, ya big dummy.  But most definitely not fossil fuels.  

This has to be part of the simulation?

Edited April 5, 2022 by fattyflattie

[52-80 19271]

43 minutes ago, Blotto said:

I don't know how up to date this site is, but it shows $27.30 as average cost. 

https://www.energy.gov/fecm/strategic-petroleum-reserve-9

Help a dumbass on the subject of strategic oil reserve (me) out. How is the release actually orchestrated? in other words, is it typically refineries that purchase the oil and if so, how is the price determined? I'm inclined to agree that this is a short sighted political stunt, I just cant find a lot of information on who benefits in the process. I have seen references to the oil being auctioned off, but in the case of the november 21 releases, it seems like the oil was delivered with a promise that the oil is returned by a future date. 

https://www.reuters.com/markets/commodities/us-sell-32-mln-bbls-mostly-sour-crude-4-spr-sites-2021-11-25/

So according to that description, its more of a swap and the government pushes the replacement cost risk to the refineries? Obviously if oil is $40 in 2024, this works out well for the buyers. If oil is at $200, not so much. 

There are a few modes of operation. Standard is a competitive sale, authorized by Prez, so I imagine it is bid by refiners (in auction, not dissimilar to Treasury bonds) and is economically equivalent to a source-blind rush of supply to market. 
 

The Secretary can also authorize smaller sales, and other arrangements just as swaps and exchanges like you mentioned for an agreed premium. 

[MoJames 8256]

On 4/2/2022 at 8:59 AM, Porterhouse said:

I did. My posts were nuked as Dr. Beeper (at my request). 

lol at people asking to have posts erased on a longhorn board about O&G.