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Oil drops most since 1982


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One point relating to Iraq, in all this oil pricing fiasco. They've known, and been told, they had to diversify for many years by IMF and WB, plus many others. They chose rather to ride on a sea of oil income that is then subsequently stolen by the likes of Maliki and hundreds of others without consequence. Now in dire straits, their hand is extended outwards again asking for sympathy, debt forgiveness, more IMF 'donations' that they will never repay. They're getting what they deserve and the citizens are suffering from the greedy, short sighted leadership. I'm hoping the citizen protests that started in October gain new speed and focus once the virus has abated, and wholesale change is on their horizon. Time will tell. In the mean time...….fly that new Iraq flag. 

 

 

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Oil's epic selloff rages on

WTI for June delivery plunged up to 42% overnight

A historic selloff in the price of oil continued on Tuesday in the wake of a supply wave that has left the world awash with crude and running out of places to store it.

West Texas Intermediate crude oil futures for June delivery, the most active contract, dropped 26.33 percent to $15.05 per barrel. The contract had plunged as much as 42 percent to $11.79 a barrel in overnight trading. May futures, which crashed 305 percent to -$36.73 a barrel earlier this week, expire on Tuesday.

“This was an epic squeeze, but let’s not pretend this weakness is related strictly to the May contract,” wrote Stephen Schork, founder and editor of the daily subscription newsletter The Schork Report.

OIL BELOW ZERO: HERE'S WHAT HAPPENED

If the New York Mercantile Exchange, where oil futures contracts are traded, doesn’t hit storage capacity this month, “it certainly will hit capacity while the June contract is prompt,” he added. With storage at the max, the June contract can “crash into the single (if not negative) digits before it is all said and done.”

Monday's plunge in May-delivery prices was prompted partly by a selloff among traders speculating on oil prices who needed to dump their holdings before the contract's expiration required them to take delivery of the crude.  Each futures contract gives the holder 1,000 barrels of oil for delivery at Cushing, Oklahoma, a key U.S. oil hub.

 

Essentially, oil bulls “got caught with their paws in the cookie jar,” Schork wrote.

U.S. crude oil inventories have swelled toward the maximum that can be stored as “stay-at-home” orders issued to slow the spread of COVID-19 have sharply reduced demand at the same time as a price war between Russia and Saudi Arabia dragged down prices.

Inventories at Cushing have surged by 48 percent since February to about 55 million barrels, closing in on the facility's 76 million-barrel limit.

A recent truce in the price war between Saudi Arabia and Russia may provide some relief.

The world’s largest oil producers, which include a slate of other nations, will cut production by 20 million barrels per day for the two months beginning May 1.

OPEC and its allies will reduce output by 9.7 million barrels while other major players such as the U.S. and Canada will cut their production mostly as a result of lower prices.

CLICK HERE TO READ MORE ON FOX BUSINESS

The agreement also says OPEC producers and their allies will trim output by 7.7 million barrels a day from July through next year.

 

https://www.foxbusiness.com/markets/oil-price-april-21-2020

 

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Great thread!

And that reminds me of the time back in around 1986.. I was working in deep South Texas on a Loffland Brothers rig in the summer time...99°

95% humidity..i was chain hand on a 5 man crew making $9.75/hour.. Working 7 and 7.  12 hour towers..

Went on days off and came back and they said I was now making $7.25/HR. The price of oil had dropped to $9/bbl on my days off..lol

I would have normally told them "I was looking for a job when I found this one" and packed my s__stuff but stuck it out, finished the well, stacked the rig, got my check and never heard from them again..

Typical in the patch.

 

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1 hour ago, dinardiggerisme said:

Great thread!

And that reminds me of the time back in around 1986.. I was working in deep South Texas on a Loffland Brothers rig in the summer time...99°

95% humidity..i was chain hand on a 5 man crew making $9.75/hour.. Working 7 and 7.  12 hour towers..

Went on days off and came back and they said I was now making $7.25/HR. The price of oil had dropped to $9/bbl on my days off..lol

I would have normally told them "I was looking for a job when I found this one" and packed my s__stuff but stuck it out, finished the well, stacked the rig, got my check and never heard from them again..

Typical in the patch.

 

 

Worked the Oil & Gas fields in Western Colorado & the Bakken in N. Dakota. “ S*it “ can & does literally change overnight. 

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Al-Jawahiri: The oil prices have not fallen, and what happened
is a drop on paper


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11:05 - 21/04/2020

 

Oil expert Hamza Al-Jawahiri revealed, on Tuesday, the details of the falling price of oil during yesterday, indicating that oil prices did not decrease and what happened is a reduction in the futures contracts for the next three months.

Al-Jawahiri said in a statement to "Al-Maalouma", "Yesterday evening, oil traders sold futures contracts at less than their price of about $ 3, which means that the price of oil changed from $ 30 to $ 27."

He added, "What was sold is the contracts in America, which are more like selling on paper at estimated prices for the next three months, as oil prices remain for an end as they are at the present time." Economic and rapid global changes. ”

He said the jeweler, said that "the continued decline in oil prices will have catastrophic repercussions on Iraq, but the economy was at the same time contributing to the support sectors of great productivity contribute to ending the rentier sector to the end," noting that "Iraq has the potential for the advancement of economic but need a government shift Pledges to implement on the ground.”
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US crude contracts rise after a sharp collapse


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21st April, 2020


US crude futures for May delivery rose today, Tuesday, after a sharp collapse in these contracts yesterday after oil stocks in the United States were almost completely filled, and demand fell. The "Bloomberg" website showed that US crude contracts for May, at 09:11 Moscow time, were trading at $ 1.3 a barrel, an increase of 103% over the previous settlement price.

On Monday, the oil markets witnessed a historic day, as US crude prices, specifically May contracts, collapsed in an event that had not occurred before. May contracts ended trading yesterday at the level of $37.63 a barrel (negative level), a decrease of 305.97%. The experts attributed the trading of contracts at a negative level, for several reasons, including technical, as these contracts expire on Tuesday (April 21, 2020), meaning that whoever has a contract of this type will have to go in order to receive oil.

In light of the full storage warehouses in the United States, merchants began to get rid of these contracts, because who will receive oil under these contracts will not find a place to store the quantity received, and if there is a place, the cost of storage will be very high. And trading contracts negatively means that the seller is willing to pay the buyer for possession of the contract, and this is less costly to the seller than the costs of owning and storing oil. It should not be forgotten that oil markets are under pressure due to the decline in global oil demand due to the Corona pandemic and the measures taken by governments to limit the spread of the virus.

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A Kurdish delegation arrives in Baghdad to discuss the reduction of Kurdistan's oil exports within the OPEC agreement

 

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15:30 - 04/21/2020
 
 

The Kurdistan Democratic Party announced, on Tuesday, the arrival of a Kurdish delegation from the Kurdistan region to Baghdad to discuss the size of the reduction in oil exports from Kurdistan in accordance with the OPEC agreement.

The deputy of the Democratic Party, Ardlan Noureddine, told / "Information" that "a large Kurdish delegation that included ministers of the regional government and advisers in the Presidency Office arrived in Baghdad and met the oil minister."

He added that "the delegation will discuss the size of the reduction in the region's oil exports in accordance with the OPEC agreement, Kurdistan's obligations with Baghdad, the region's share and other sticking points prior to the formation of the Al-Kazemi government."

And the Kurdistan Democratic Party announced last Sunday that it agreed with the candidate Mustafa Al-Kazemi to grant them three ministries of justice, finance, and construction. 

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Kurdistan marks "positive" as oil prices drop: it must be exploited

 

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21st April, 2020


The Energy Committee of the Kurdistan Regional Parliament confirmed, on Tuesday, the impact of low oil prices on the salaries of employees in the region and Iraq. Since yesterday, the US crude witnessed a historic collapse of $ 37 minus, which created serious concerns about the impact of this on the OPEC basket, where Iraqi oil is linked.

In this regard, a member of the Energy Committee in the Kurdistan Regional Parliament, Sherko Jawdat, told Shafaq News, "The low oil prices will have a significant impact on the budget and thus on the salaries of employees in Iraq and the region." But it indicated the existence of solutions, especially after the recent OPEC + reduction agreement.

Jawdat called for "taking advantage of the reduced amount in the production of local energy to generate electrical energy and oil derivatives", pointing out that "the drop in the price of oil is a good opportunity to reduce the price of gasoline and oil for the local product, as well as a good opportunity for the regional government to fight corruption, return money, organize the bag, drawings, and fines to reduce Negative impact."

Jawdat pointed out that "natural gas in the world will not become an alternative to oil, but if oil continues to decline in this way, surely the world will think of a way to occupy natural gas in the place of oil", pointing out that "the Kurdistan Region previously took steps in this direction and relied on natural gas to produce energy in the region But so far, the gas will not become an alternative to oil due to the contracts that the regional government has concluded with foreign oil companies. Brent crude prices tumbled by about 22 percent and fell below $ 20 a barrel, while the price of US crude oil for May fell again below zero today, Tuesday.

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How did speculators get US oil prices below zero?

 

- 4 Hours Ago
 
 

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On April 20, 2020, it will be the first day that North America’s oil price, known as “West Texas crude,” has a negative price, since the beginning of future oil sales in 1983.

The price of West Texas Intermediate crude barrel reached $ 37.63 below zero, with transactions closed on Monday.

Speculators between risk and greedy calculations are two images, one in general and two in particular, through which the developments of the American oil market that brought the value of oil for May delivery (which was supposed to be delivered next month) to zero can be simplified until it reached negative $ 37 a barrel, This means that oil producers are willing to pay money to buyers in order to dispose of their stocks.

The first picture is general and related to the unprecedented and unexpected decline due to the repercussions of the emerging Corona virus, which forced several billion people to stay in their homes, stopped driving cars and riding aircraft, and reducing imports from large consumers such as China, Japan, India and South Korea.

On the other hand, a price war between Russia and Saudi Arabia, and the huge American production, have led to a decline in the prices of energy sources around the world during the past three months

The fullness of US storage places has heightened fears and expedited the disposal of May future purchase contracts that have to be settled before noon today, Tuesday, April 21.

The second picture that led to the collapse of the temporary American oil market is related to the politics and accounts of fear and greed from major market speculators such as Bank of America, Tes Manhattan, Morgan Stanley, Citibank and other major American financial institutions, as Sherif Othman, economist at the Washington Analytica Foundation in Washington, DC, confirmed in an interview with him With Al-Jazeera Net.

“Speculators have been tempted by the significant decline in recent months and weeks to sign great contracts when West Texas crude fell to low levels of $ 20 and reached ten dollars, and they bought large quantities in the hope of higher prices, resale, and gains,” Othman says.

However, with the continued general closure of the economy, the travel ban, and car rides, demand decreased in a way that no one expected, and the supply increased to the point of trying to get rid of it at any price, especially with the expected high cost in storage and transportation.

“They had to get rid of these contracts before Tuesday, April 21st, the date for settlement of May delivery contracts,” the economist continues.

He adds that the calculations of “fear and greed from speculators have greed in this round over the accounts of fears, so the collapse occurred, but I think that the equation will turn and fear will overcome greed in the coming decades, and from here I do not expect a similar collapse of what happened on the twentieth of April” .

Futures oil prices, which were supposed to be received in June, were affected by 12% due to what the markets witnessed yesterday.

Filling up reserves
: US President Donald Trump commented on the collapse of the oil market, and confirmed that the government will try to take advantage of falling prices to fill the reserves.

"Prices have reached a record," Trump said during the daily press conference. "We are studying the benefit of filling strategic reserves of oil, and we are looking to put 75 million barrels in it, and thus we will have filled with excellent prices."

The consequences of this development will have severe impacts on many American shale oil companies, in addition to the impact on the upcoming presidential elections, as this industry is concentrated in important and swinging states, all of which Trump won in the 2016 elections, such as Pennsylvania and Ohio.

Pennsylvania has twenty votes among the members of the electoral college from swing states, Trump won 48.1% of her voters, while Hillarious Clinton won 47.6% of the vote, and Trump won only forty thousand.

As for the state of Ohio, it has 18 votes among the electoral college, and Trump won by 51.7%.

Shale oil
and low oil prices have pushed shale oil companies to follow strict austerity measures with which workers lost a large part of their salaries, thousands of others have been dispensed, and thousands of others may be dispensed with the expectation that oil prices will not rise to their previous rates, which included covering the high production costs of oil The rocky amount of twenty to ninety dollars per barrel.
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A study by the Energy Research Institute and presented by CNN stated that even with US oil prices reaching twenty dollars, 533 American shale companies will declare bankruptcy by the end of next year. The number of bankrupt companies will reach 1100 companies if oil prices reach ten dollars per barrel.

This is accompanied by a historic increase in the number of Americans applying for unemployment benefits, and the number has reached more than 22 million in the last four weeks.

The economist at the Washington Analytica Corporation concluded his talk to Al-Jazeera Net by saying, "Unless there is a breakthrough with which economic activities return to their previous levels and that coincides with the arrival of a vaccine and vaccine to confront the emerging corona virus, energy prices will not return to their previous times."

Source: Al-Jazeera

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Updated .. NYMEX May delivery contract turns into positive range .. and Brent lower $ 19
 
 
Updated .. NYMEX May delivery contract turns into positive range .. and Brent lower $ 19
 
 
April 21, 2020 10:02 PM 
 
Last updated: April 21, 2020 10:02 PM
 
 

Direct: The price of the US NYMEX crude for May delivery rose about 125 percent when settling on Tuesday, to recover from the negative range, while the benchmark "Brent" crude tumbled below $ 19.

The strong moves in black gold prices come amid a dilemma on the supply and demand sides in light of the accumulation of oil supplies in light of a historical decline in demand with the repercussions of combating the spread of the "Covid-19" virus.

The notable rise in the price of the May contract, which expires today, comes after a historical collapse yesterday that pushed it into negative territory for the first time.

Negative price means that producers have to pay money to traders to get rid of oil, which comes in light of the approaching depletion of storage space.

For his part, US President Donald Trump called for exploiting the drop in oil prices to fill the US strategic reserve of crude.

Upon settlement, West Texas Intermediate crude for May delivery, a contract that expires today, rose by 125 percent to climb to $ 10.1 after recording negative $ 37.63 at the end of yesterday's session.

As for the price of US crude futures for June delivery, which is the most active contract, it witnessed a decrease of 43.4 percent, to fall to $ 11.75 a barrel.

By 6:50 pm GMT, Brent crude for June delivery fell about 26.3 percent to $ 18.80 a barrel.

The benchmark crude recorded $ 17.51 a barrel earlier in trading, the lowest level since 2002.

LINK

 

Edited by DinarThug
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What legal measures can be taken to address the financial crisis and the collapse of oil?

 04/21/2020




What legal measures can be taken to address the financial crisis and the collapse of oil? %D8%B9%D9%84%D9%8A-%D8%A7%D9%84%D8%AA%D9%85%D9%8A%D9%85%D9%8A-696x435

Information / private ...
Legal expert Ali al-Tamimi revealed, on Tuesday, a set of legal decisions that the government can take to address the financial crisis and the collapse of oil without compromising the salaries of employees.
Al-Tamimi said in a statement to / Information /, “The government can take a number of decisions that have a legal effect to alleviate the current financial crisis by stopping the government appointment for a period of at least 5 years and allowing the private sector to work in the Iraqi market, as well as adopting a policy The productivity of the ministries to supplement the state treasury, for example, the Ministry of Education collects contributions, fines, fees, and other sums from private schools and kindergartens to be state revenues.
He added that "all these measures can be taken to reduce the current financial crisis."
With regard to deduction of employee salaries between Al-Tamimi, “Reducing or reducing employee salaries cannot be modified by amending the laws that regulate this, including the Salary Scales Law 22 of 2008, which regulates the form of salaries based on service, certification, work years, number of children, and the job grade, as well as the Iraqi Civil Service Law, it protects Employees from any manipulation of their salaries, ”noting that“ the legal rule says the law is only amended by law and amending these laws requires the vote of Parliament. ”
And revealed the Parliamentary Finance Committee, earlier in the day, Monday, many proposals and scenarios in the House of Representatives to secure the salaries of employees after the arrival of the budget, noting that one of them provides for saving 25% of their salaries spent at a later time. 25 h has ended


 

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EX-BP CEO: Low Oil Prices Are Here To Stay

By Tsvetana Paraskova - Apr 21, 2020, 3:00 PM CDT

The current situation on the oil market with too much supply and collapsing demand is similar to what happened in the middle of the 1980s when a glut led to oil prices staying low for 17 years, John Browne, who was chief executive at BP between 1995 and 2007, told the BBC on Tuesday.

“The prices will be very low and I think they will remain low and very volatile for some considerable time,” Browne told the BBC, as carried by Reuters.

“There is still a lot of oil being produced that is going into storage and not being used,” BP’s ex top executive said.

Browne’s comments came a day after WTI Crude prices of the May futures contract crumbled by more than 300% to settle at -$37 a barrel—crashing into negative territory for the first time ever as traders rushed to get rid of the May contract to avoid actually owning physical oil barrels for delivery in May.

Commenting on the price collapse, BP’s former CEO Browne said:

“This is very reminiscent of a time in the mid-1980s when exactly the same situation happened - too much supply, too little demand and prices of oil stayed low for 17 years.”

Currently, collapsing oil demand with lockdowns in many countries and airlines struggling to survive as no one travels is wreaking havoc on the oil market where the glut continues to grow, despite pledges from OPEC+ to cut 9.7 million bpd production in May and June. Much higher production than current demand is quickly filling storage capacity around the world, and analysts say that tanks and tankers will be brimming by the end of May, at the latest.

Even after this apocalyptic carnage on the oil market, when demand recovers, it could still be weaker than before, also because of climate change awareness, according to ex-BP Browne.

“And that demand will be filled primarily by those who have no choice but to produce oil - so the state oil companies of the world,” he told the BBC.

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Oil Inventories Near Breaking Point As API Reports 13 Million Barrel Build

By Julianne Geiger - Apr 21, 2020, 3:46 PM CDT image.gif.8afacf38f76864ac0ef33714edc3ba6a.gif

The American Petroleum Institute (API) estimated on Tuesday another large crude oil inventory build of 13.226 million barrels for the week ending April 17 as the demand destruction continues unchecked and stay-at-home orders in the United States drag on.

Today’s inventory build was smaller than the expected 15.15 million barrels.

In the previous week, the API estimated a large build in crude oil inventories of 13.134 million barrels, while the EIA’s estimates were for a build of 19.2 million barrels for that week.

 

Oil prices were trading down on Tuesday afternoon prior to the API’s data release, although up considerably from Monday when WTI was trading in negative numbers, as was the May 2020 futures contract.

 

At 4:25 pm EDT on Tuesday the WTI benchmark was trading down on the day by $7.32 (-35.83%) at $13.11—down roughly $7 per barrel week over week. The price of a Brent barrel was also trading down on Tuesday, by $5.72 (-22.37%), at $19.85—down nearly $10 week on week.

 

https://oilprice.com/Latest-Energy-News/World-News/Oil-Inventories-Near-Breaking-Point-As-API-Reports-13-Million-Barrel-Build.html

The API reported a build of 3.435 million barrels of gasoline for week ending April 17, after last week’s 2.226-million-barrel build. This week’s build compares to analyst expectations for a larger 3.578-million-barrel build for the week.

Distillate inventories were up by 7.639 million barrels for the week, compared to last week’s 5.640-barrel build, while Cushing inventories saw a large gain of 4.913 million barrels.

 

 

 

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending April 10 fell to 12.3 million bpd—down 100,000 bpd for the week, and down 800,000 from its high.

At 4:41 pm EDT, WTI was trading at $13.05 while Brent was trading at $19.80.

 

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Saudi Arabia Slashes Asian Oil Exports By 2 Million Bpd

By Tsvetana Paraskova - Apr 17, 2020, 11:00 AM CDT

Saudi Arabia’s oil giant Aramco will be sending 4 million barrels per day (bpd) of its crude to Asia in May, down from the full contractual volumes of 6 million bpd, a Saudi source with knowledge of Aramco’s plans told Reuters on Friday.  

“The full contractual volumes to Asia are about 6 million bpd. What Aramco has allocated is what was nominated, which is around 4 million bpd,” the Saudi source told Reuters.

Earlier on Friday, other sources in Saudi Arabia had told Reuters that Saudi Aramco would be sending the full 6 million bpd contractual volumes to its customers in Asia.

The lower allocations, due to the nominations of around 4 million bpd, as per the Saudi source, suggest, on the one hand, that Saudi Arabia is lowering its oil supply to the market in line with its commitment to the new OPEC+ deal. On the other hand, the lower nominations from Asian customers suggest that despite the deep discounts of Saudi crude to Asia, demand for crude is still lower than the usual volumes.

At the beginning of this week, Aramco announced the pricing for its oil for May, offering deeper discounts for customers in Asia for the second month in a row, despite Sunday’s historic global production cut deal—a sign that the Kingdom continues to fight for market share in Asia even after the formal end to the price war.

Premium: Missiles Fired In Iraq As Proxy War Heats Up

Under the new OPEC+ agreement, Saudi Arabia has pledged to reduce its oil supply to the market to 8.5 million bpd in May and June from a baseline of 11 million bpd.  

The market and analysts, however, see the new deal as ‘too little too late’ to make a meaningful impact on growing global inventories amid crashing demand.

On Thursday, the energy ministers of Saudi Arabia and Russia, Prince Abdulaziz bin Salman and Alexander Novak, respectively, held a phone conversation and issued a statement, via the Saudi Press Agency, that “Both our nations are strongly committed to implement the agreed target cuts over the next two years and will continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary.”

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Saudi Arabia Hints At Further OPEC+ Action

By Tsvetana Paraskova - Apr 21, 2020, 4:00 PM CDT

Riyal

As the oil market meltdown intensified a week after the new OPEC+ production cut deal, Saudi Arabia has hinted for a second time in two weeks that it is ready to take further measures with OPEC to restore oil market stability.

At a Tuesday meeting of the Saudi cabinet chaired by King Salman bin Abdulaziz Al Saud, discussed Saudi Arabia's "keenness to achieve stability in the oil market, its affirmation with the Russian Federation of a firm commitment to implement agreed targeted cuts over the next two years, their continuing monitoring of oil market situations closely, and being prepared to take further measures jointly with OPEC+ and other producers,” the official Saudi Press Agency reported.

Collapsing global oil demand and shrinking storage capacity have pressured oil prices since the OPEC+ group came up with a new plan to restore ‘stability on the market’ – its proxy PR buzzword for driving oil prices higher.

 

The market and analysts, however, see the new deal as ‘too little too late’ to make a meaningful impact on growing global inventories amid crashing demand.

Despite the OPEC+ deal, prices continued on a downward spiral last week as inventory reports in the United States showed a record-breaking commercial crude build amid crashing demand. 

Last Thursday, the energy ministers of Saudi Arabia and Russia, Prince Abdulaziz bin Salman, and Alexander Novak, respectively, held a phone conversation and issued a statement via the Saudi Press Agency saying that both nations were "strongly committed to implement the agreed target cuts over the next two years and will continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary.” 

 

https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Hints-At-Further-OPEC-Action.html

 

 

Despite the typical Saudi jawboning of the market, the demand destruction and the swelling storage with oversupply nowhere to go led to a historic crash in WTI Crude into negative territory on Monday.

 

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Texas Oil Regulators Consider Production Cuts After Historic Oil Price Crash

By Tsvetana Paraskova - Apr 21, 2020, 10:30 AM CDT

The Texas oil and gas regulator, the Texas Railroad Commission, is meeting on Tuesday to hear testimony about potentially curtailing statewide oil production after U.S. oil prices plunged 300% to settle at -$37 a barrel on Monday.

The Texas Railroad Commission has already held a first hearing on possible mandated curbs in the oil-producing state home to the Permian Basin.

At last week’s hearing, Pioneer Natural Resources and Parsley Energy were pushing for the first proration of oil production in Texas since the 1970s. Meanwhile, major companies, including ExxonMobil and pipeline operators, expressed opinions that the regulators should let the free market dictate the production in the state.

Smaller independent producers tend to support some kind of coordinated action to restrict supply, arguing that the free market will wipe out the smaller guys in the industry.

Enterprise Products Partners Co-CEO Jim Teague, for his part, told the Commissioners in his testimony, as carried by CBS7:

“Do you really think that a cut by Texas can fill a 25 million barrel demand hole?”  

Today’s meeting of the Texas Railroad Commission comes just a week after the previous one. Still, the market circumstances and sentiment are so much more dire this time, with WTI Crude oil prices sinking into negative territory for the first time in a 300% price crash on Monday. While the price collapse was driven by the expiry of the May futures contract today with traders running for the exit to avoid getting stuck with holding actual physical barrels for delivery with no place to store oil, the sentiment has spread to Brent Crude prices today, which plunged by 20% to $20 a barrel early on Tuesday.

Commenting on Monday’s WTI Crude price crash, Texas Comptroller Glenn Hegar said in a statement:

“Today’s market activity was unprecedented and likely indicative of very limited storage capacity. May contracts traded well into negative territory as the market prepares to shift focus to June contracts.”

“While this unprecedented volatility is concerning, the greater impact to Texas will come if demand remains historically low for a prolonged period of time and supply gluts continue to strain storage capacity,” Hegar said.  

“A key question is whether we could see a repeat of this with the June expiry next month. It is likely that storage this time next month will be even more of an issue, given the surplus environment, and so in the absence of a meaningful demand recovery, negative prices could return for June,” ING strategists Warren Patterson and Wenyu Yao said on Tuesday.  

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Alexandria Ocasio-Cortez Rejoices At Negative Oil Prices

By Irina Slav - Apr 21, 2020, 9:30 AM CDT AOC

Congresswoman Alexandria Ocasio-Cortez rejoiced at the news that U.S crude oil prices had dropped into negative territory earlier this week, tweeting “You absolutely love to see it.”

In the tweet, which she later deleted, Ocasio-Cortez also wrote: “This along with record low interest rates means it’s the right time for a worker-led, mass investment in green infrastructure to save our planet.”

Ocasio-Cortez is perhaps the most vocal opponent of the U.S. oil industry in Congress, along with Bernie Sanders, and she was also the author of a Green New Deal that envisaged a shift to a completely renewable energy future. 

 

 

Some analysts have estimated that this shift would cost tens of trillions of dollars.

Oil prices turned negative yesterday, with West Texas Intermediate falling below minus $37 a barrel as traders scrambled to ditch their May delivery oil contracts to avoid actual delivery that would have come at a steep cost as free storage space shrinks.

However, Ocasio-Cortez’s joy at this price development may be both ill-timed and misguided. As Senator Ted Cruz tweeted in response, “Which part of the millions of blue-collar workers losing their jobs & small refineries closing their doors forever is what you ‘love to see’ (per your deleted tweet) @AOC? Asking for those in Texas & across USA whose livelihoods (ability to put food on the table) are AT RISK.”

 

 

Premium: Oil Storage Nears Its Limit

But job loss aside, Congresswoman Ocasio-Cortez appears to be confused about the relationship between the fossil fuel industry and the renewable energy industry. The nature of this relationship is striking: when oil is cheap, renewable energy reaps no benefits because consumption of the cheap commodity increases.

Granted, right now, we are in a unique situation when oil is cheap because there is no demand for it and the supply is too high. However, demand for electricity, including from renewable sources, is also down because of the lockdowns. Solar and wind industry representatives even warned of massive job losses in their industry because of the pandemic. In other words, the renewable energy industry is also in trouble—it’s not just bad old oil. And this trouble, along with the 22 million workers that lost their jobs over than last four weeks alone, will make her mass green investment vision particularly challenging to materialize.

By Irina Slav for Oilprice.com

 

https://oilprice.com/Latest-Energy-News/World-News/Alexandria-Ocasio-Cortez-Rejoices-At-Negative-Oil-Prices.html

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What the oil crash means for crypto: The experts weigh in

Monday’s oil flash crash wreaked havoc in traditional markets, but is that good for crypto?

Apr 21, 2020

In Brief

  • Bitcoiner and Real Vision’s macro investor Raoul Pal speculated that dropping oil prices could affect other commodities and the US dollar.
  • Analyst and VC Nic Carter points to potential risk of sovereign defaults and how stablecoins have boomed past a $9 billion market cap.
  • Many other takes from experts in Bitcoin and Crypto.
 
 

 

First everyone in crypto became coronavirus experts. Then stock market and financial policy experts. Now crypto experts are chiming in on the oil crash, where a once thriving and essential commodity turned negative.

 

Here’s what some experts in crypto have said:

End the War in Iraq?

 

Anthony Pompliano of Morgan Creek Capital has been loquacious as usual. On Twitter, he asked his audience to ponder whether the US should end the US war in Iraq as oil prices plummeted:

 

 

Some people replied with answers like:

 

 

 

 

 

 

 

 

Effects on commodities and global trade

 

Bull Bitcoin’s and Canada’s foremost “Toxic Bitcoin Maximalist,” Francis Pouliot, took aim at his home country about how it could have profited from past oil prices with Bitcoin. Canada’s Western Select Oil (WCS) was trading at -$29.75 at the time of his tweets.

 

 

 

 

 

As for other macro effects on commodities and trade, Real Vision’s CEO Raoul Pal continued touting his bullish case for Bitcoin. Pal said he doesn’t see any other way “the dollar doesn’t explode higher and US rates don’t go negative,” meaning deflation for commodities and inflation for the foreign fiat currencies competing against the world’s reserve currency.

 

 

Pal speculated that the drop in oil would have catastrophic effects on the prices of corn, soy beans, sugar, and raw industrial materials—a deflationary scenario “where the US farmer is sadly going to be driven to bankruptcy” from high debts and deflation.

 

 

https://twitter.com/RaoulGMI/status/1252396843851382786?s=20

Coin Metrics’ Nic Carter posted a chart from the World Bank on Twitter, which ranked countries that rely on fuel exports as a large percentage of their exported merchandise. The list was led by Angola, Brunei, Nigeria, and Azerbaijan, and sprinkled in with some Latin American, African, European, and Middle Eastern countries.

Carter pondered whether these countries could risk “sovereign defaults” from their reliance on oil exports, which could mean the death of their native fiat if they rely on US dollars from oil revenues:

 

 

 

Bloomberg’s Joe Weisenthal summed up what this means for oil exporting countries whose vaults may be low on US dollars:

 

 

The effects on Bitcoin mining and Crypto markets

 

Bull Bitcoin CEO, and Canada’s foremost “toxic Bitcoin maximalist, Francis Pouliot, called to “Make Venezuela Great Again” by mining Bitcoin with their cheap oil and gas.

 

 

Pouliot also tweeted a thread at Alberta’s Premier Jason Kenney, the head of province in Canada under major strain as a top oil producer and exporter. In the thread, Pouliot asked the author of The Bitcoin Standard, Saifedean Ammous, to show how government’s “could encourage [Bitcoin] mining to reduce trade deficits in case of Hyperbitcoinization.”

 

 

(On a side note, Pouliot also posted a funny video set to Pink Floyd’s song “Money,” showing how Canadians can use their government-granted emergency funds to buy Bitcoin.)

 

 

 

 

As for Stablecoins, Coin Metrics’ Nic Carter pointed to data which showed the market had eclipsed $9 billion dollars.

 

 

In that thread, Carter answered questions from readers about why stablecoins are surging, and what the uses might be. He said that some investors in emerging markets are using stablecoins alone, as opposed to real fiat currencies in banks, for “normal working capital purposes,” meaning for liquidity. Strong fiat currencies such as US dollars and Euros might be difficult to access abroad amid the drop of oil revenues.

He also alluded to how these investors don’t need a traditional on-ramp for stablecoins, but use crypto instead. “You don’t need to redeem a stablecoin with the issuer to use it as money,” he added.

 

 

 

 

Last month, Carter spoke to Decrypt about how the financial crisis around the world from CoronaVirus, and the world governments’ brrr brrr (money printing), may have caused the stablecoins pump.

Over at crypto data analytics firm Messari—a platform that displays the price movements of oil, the S&P 500, Bitcoin, alongside covid data—founder Ryan Selkis retweeted Pal’s take on commodities dropping with oil and asked how people still don’t think there’s “a major currency failure.”

Oh and “buy bitcoin.”

 

https://decrypt.co/26285/what-the-oil-crash-means-for-crypto-the-experts-weigh-in

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Iraq's Kurdistan region says it is committed to OPEC+ oil output deal

 

Iraq's semi-autonomous Kurdistan Region said on Sunday it is committed to its share of an OPEC+ deal to reduce oil output to support prices and curb oversupply, Iraq's state news agency reported, according to Reuters.


The announcement followed a meeting between Kurdish and Iraqi oil ministry officials in Baghdad where the Kurdistan government agreed to provide the ministry with monthly reports on oil production.


The Organization of the Petroleum Exporting Countries (OPEC) and other oil producers agreed on April 12 to cut production by a record 9.7 million barrels per day (bpd) from May.

 

https://www.thebaghdadpost.com/en/Story/47976/Iraq-s-Kurdistan-region-says-it-is-committed-to-OPEC-oil-output-deal

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