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View Full Version : Texas crude went to minus $37 a barrel today...



Kev Williams
04-21-2020, 1:47 AM
Some past predictions :)


"Petroleum has been used for less than 50 years, and it is estimated that the supply will last about 25 or 30 years longer. If production is curtailed and waste stopped it may last till the end of the century. The most important effects of its disappearance will be in the lack of illuminants. Animal and vegetable oils will not begin to supply its place. This being the case, the reckless exploitation of oil fields and the consumption of oil for fuel should be checked."
— July 19, 1909 Titusville Herald (http://www.paleofuture.com/blog/2009/6/14/oil-and-gas-will-eventually-be-exhausted-1909.html) (Titusville, PA)

"In meeting the world's needs, however, the oil from the United States will continue to occupy a less and less dominant position, because within the next two to five years the oil fields of this country will reach their maximum production and from that on we will face an ever increasing decline."

— October 23, 1919 Oil and Gas News

(https://books.google.com/books?id=uuxYAAAAYAAJ&dq=%22the%20oil%20fields%20of%20this%20country%20w ill%20reach%22&pg=RA8-PA20#v=onepage&q=%22the%20oil%20fields%20of%20this%20country%20wi ll%20reach%22&f=false) Capt. H. A. Stuart, director of the naval petroleum reserves, told the Senate Naval Affairs Committee today the oil supply of this country will last only about 15 years.
"We have been making estimates for the last 15 years,' Stuart said. 'We always underestimate because of the possibility of discovering new oil fields. The best information is that the present supply will last only 15 years. That is a conservative estimate.'"
— March 9, 1937 Brooklyn Daily Eagle
(http://www.newspapers.com/image/53707879)
"There is a growing opinion that the United States has reached its peak oil production, the Oil and Gas Journal pointed out in its current issue. Since 1938, discoveries of new oil have not equaled withdrawals, in any single year, although there is a very good chance that 1943 will see enough new Ellenburger oil in West Texas to provide an excess."
— June 7, 1943 Bradford Evening Star (http://www.newspapers.com/image/76700239)(Bradford, PA)

"Faced with the threat that our nation's petroleum reserves may last only thirteen years, geologists are striving to tap the almost limitless supply of oil located beneath the seas off our coastline. The first attempt to get oil from the depths of the Atlantic Ocean was begun this month near Cape Hatteras, North Carolina, and Secretary of the Interior Harold L. Ickes revealed that the scientists are making progress in their efforts to reach the underwater oil."
— December 10, 1945 Times Recorder (http://www.newspapers.com/image/19443138) (Zanesville, Ohio)

"M. King Hubbert of the Shell Development Co. predicted [one year ago] that peak oil production would be reached in the next 10 to 15 years and after that would gradually decline."
— March 9, 1957 Corpus Christi Times (http://access.newspaperarchive.com.ezproxy.lapl.org/us/texas/corpus-christi/corpus-christi-times/1957/03-09/page-4) (Corpus Christi, TX)

"A geologist stuck a figurative dipstick into the United States' oil supplies Tuesday and estimated that the country may be dry in 10 years."
— August 3, 1966 Brandon Sun (http://www.newspapers.com/image/67086773) (Brandon, Manitoba)

"At any rate, U.S. oil supplies will last only 20 years. Foreign supplies will last 40 or 50 years, but are increasingly dependent upon world politics."
— May 1972 Bulletin of the Atomic Scientists (https://books.google.com/books?id=pwsAAAAAMBAJ&lpg=PA29&ots=zoY4QTY67Z&dq=%22u.s.%20oil%20supplies%20will%20last%22&pg=PA29#v=onepage&q=%22u.s.%20oil%20supplies%20will%20last%22&f=false)

"As a nation, Americans have been reluctant to accept the prospect of physical shortages. We must recognize that world oil production will likely peak in the early 1990's, and from that point on will be on a declining curve. By the early part of the 21st century, we must face the prospect of running out of oil and natural gas."
— 1977 US Department of Energy Organization Act (https://books.google.com/books?id=s9IeQXiuJDsC&q=%22oil+production+will+likely+peak%22&dq=%22oil+production+will+likely+peak%22&hl=en&sa=X&ei=aNiIVK7ZGJG4oQTZ1oK4Cw&ved=0CFEQ6AEwCA)

"Stressing the need for conservation, [physicist Dr. Hans] Bethe said the world will reach its peak oil production before the year 2000. Production of oil worldwide will then drop to zero over about 20 years, he said. Rigorous conservation could stretch the world's oil supply to the year 2050, he said.
— October 17, 1980 Syracuse Post Standard (http://access.newspaperarchive.com.ezproxy.lapl.org/us/new-york/syracuse/syracuse-post-standard/1980/10-17/page-82) (Syracuse, NY)

"Unfortunately, oil production will likely peak by 2020 and start declining. Without a change, developing countries will ultimately be left in the dark, and developed countries will struggle to keep the lights on. Conflict is inevitable. My guess is that this won't become a big issue unless there is a thalidomide event. We will have to see in the rear-view mirror that we are past the peak in worldwide oil production."

— Richard Smalley, Nobel Laureate in Chemistry (https://books.google.com/books?id=t81NAQAAIAAJ&q=%22oil+production+will+likely+peak%22&dq=%22oil+production+will+likely+peak%22&hl=en&sa=X&ei=aNiIVK7ZGJG4oQTZ1oK4Cw&ved=0CEkQ6AEwBg), 1996

"Global supplies of crude oil will peak as early as 2010 and then start to decline, ushering in an era of soaring energy prices and economic upheaval — or so said an international group of petroleum specialists meeting Friday."

— May 25, 2002 Index Journal (http://www.newspapers.com/image/70260687/)(Greenwood, SC)

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--And here we are, 1/3 the way thru the year two thousand and twenty, in the middle of a worldwide pandemic, and there's so much oil in reserve that (theoretically at least) they would have to pay you $38 for every barrel you cart away...

So, did anyone have any Put Options on crude? Holy mackerel ....

eugene thomas
04-21-2020, 3:06 AM
Remember in the $140 a barrel days government buying oil for stragic reserve. Now its cheap but politicans not wanting to buy.... go figure. Glad i do honests days work.

roger wiegand
04-21-2020, 8:04 AM
The prediction is still correct, as always the timing is messy.

BOB OLINGER
04-21-2020, 8:18 AM
Not sure where you got this - President Trump said late yesterday during his press conference that he's promoting buying oil and filling reserves.

Stan Calow
04-21-2020, 8:26 AM
The prediction is still correct, as always the timing is messy.
Yep, that's true. The oil companies themselves made plenty of those predictions over the decades.

Since Texas depends on drilling revenue to fund state operations (rather than income tax) they will especially be hurting. Lots of negative impacts: loss of jobs for drillers, refineries, truckers, frackers, shale oil projects, pipelines, etc.

Rick Potter
04-21-2020, 2:05 PM
I wanted to buy me some of those -$37 barrels of oil, but found out the barrel is not included. :mad:

Andrew Seemann
04-21-2020, 2:17 PM
I wanted to buy me some of those -$37 barrels of oil, but found out the barrel is not included. :mad:

Ironically that is the exact issue, no where to store it:)

Tom M King
04-21-2020, 3:59 PM
Sounds like I got ripped off buying off road diesel for 1.44 today:), but I needed it.

Adam Herman
04-21-2020, 4:57 PM
11 years in the business, this rodeo is not my first, but its harder to hold on to the rope this time. lots of friends are getting laid off, i'm doing my job and keeping my head down.

lots of fixed costs go into your gallon of fuel at the pump.

yep. every bathtub, tanker and pipe is full. its a problem.

texas, wyoming, colorado, alaska and lots of other states depend on the royalties from production, along with about 30 different countries that rely on it for a significant portion of their budget.

the crash was really caused by the USO ETF that is now being dismantled.

Jim Koepke
04-22-2020, 2:57 AM
Interesting world where in effect a person with the ability would get paid $37 a barrel to store oil for some one who after some time passes would be happy to buy it back from you for whatever the market happens to be.

My old residence used to be a few miles from what we used to call tank farm hill. Standard Oil had storage tanks all over the place. Many of them were removed years ago.

jtk

Rob Luter
04-22-2020, 11:50 AM
Sounds like I got ripped off buying off road diesel for 1.44 today:), but I needed it.

I wish diesel would come down like gas. In my neck of the woods Regular gas is $1.15, Over the road diesel is $2.39. My daily driver is a diesel.

Kev Williams
04-22-2020, 12:13 PM
So how many of you folks paying $1.44 for diesel and $1.15 for gas have FIVE refineries in your area, that refine oil that comes from only 100 miles away?
430995
3 of these refineries are only 14 miles from me-- yet for some stupid reason we here in the Salt Lake area consistently pay more for our gas than most of the country.

Today's local gas station prices:
430996 430997

And just to salt the wound, our octane ratings? 85, 88, and 91.

Seems the oil industry in Utah has figured out a failsafe for these kinds of problems... :mad:

Jim Koepke
04-22-2020, 2:23 PM
yet for some stupid reason we here in the Salt Lake area consistently pay more for our gas than most of the country.

It is likely local taxes on gasoline sales. At least your lowest prices are better than our local lowest prices:

431001

The Fred Meyer price is the base price. With their rewards card a person gets a 3¢ per gallon discount. For every $100 of purchases using their rewards card the person receives 10¢ per gallon discount, up to $1 per gallon. My last fill up was with a 40¢ per gallon discount for a price at the time of $1.999 per gallon.

jtk

Dave Anderson NH
04-23-2020, 10:05 AM
I filled up my Outback on Monday for the first time in 5 week and it was only half empty. I never thought I'd see that happen. The lowest I've seen at a branded gas station is $1.87 but some of the unbranded is a bit lower.

Adam Herman
04-23-2020, 1:05 PM
So how many of you folks paying $1.44 for diesel and $1.15 for gas have FIVE refineries in your area, that refine oil that comes from only 100 miles away?
430995
3 of these refineries are only 14 miles from me-- yet for some stupid reason we here in the Salt Lake area consistently pay more for our gas than most of the country.

Today's local gas station prices:
430996 430997

And just to salt the wound, our octane ratings? 85, 88, and 91.

Seems the oil industry in Utah has figured out a failsafe for these kinds of problems... :mad:

Their oil comes from further than 100 miles. do you know what grade each is designed for? how about how much it costs to get the oil out of the ground around there? Production in
Utah is around 30 mil bbl per year. refining capacity is about 70 mil bbl per year. Utah refiners refine different grades from Canada, Wyoming, Colorado, Utah and elsewhere.

plus, fixed costs are higher in an area like SLC. fed tax is 18.4 cents and it looks like utah is 30.4 cents per gallon. as we are using less the inventory is also staying longer, so that may still be 30 or 40 dollar a bbl oil in the tank at the station.