Fuel Price Drop

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
21

The Crude Oil price reflects one’s ability to go fetch the oil at the point of sale, and then refine it, since you won’t be able to sell that oil on as “unrefined barrels” any longer.
No one has the capacity to STORE it!

Looking at this list on Wiki “Largest refinining capacities” - and I was surprised to see Saudi Arabia not even on the top 15 list…

INIDA is top dog in the world - that can now bring in crude as cheap as chips, refine it - and continue to supply distillates (Petrol, Diesel, Paraffin, Kersosine) at reasonable prices to the rest of the planet who are still using cars, trucks, aircraft etc. even during this lockdown.

The price of Gasoline for instance, troughed down to 44c a couple of weeks back, and is now back to around the 70c per US gallon mark.

Our own forecourt prices - will probably hover at around current levels as a consequence - 102.7 seems to be the new “going rate” now.

America - is sitting mighty pretty with HUGE refining capacity, which will gradually consume their own current glut they have.

That means transportation across america - will never be so cheap in the months and years to come.
More trucks running more road miles means more trucks to be built and maintained, as well as more truckers to drive them, because there are only 24 hours in a day…

Over HERE in blighty though? - Who can say if we’ll end up benefiting from the same post-lockdown things that will seemingly benefit America??

FFS in this country - you can’t even get government hand-outs any more, without the risk of some bank or some layer of beuracracy intercepting that cash, and leaving us all both employed AND skint if we’re not careful…

Perhaps the way to go would be to:

(1) Buy shares in Indian firms
(2) Find a generous Indian businessman/woman to work for
(3) Drive for an American transport giant
(4) Default any debts owned by the Chinese or the EU in any fashion
(5) Move to a part of the country that has the least NIMBYS living there at present
(6) Vote for political parties that are Pro-Infrastructure rather than Pro Burocracy or Pro Big Business…

(7) Give anyone giving you a hard time - as good as you get.

A lot of people will be falling past the “prepared and preparing” during the months to come. :bulb:

As I finish writing this, I look at the “immediate delivery” price for Crude - and see it has now slumped to a mere $3 per 42 gallon barrel. That’s THREE dollars

The main market closes at 19:30 BST in about an hour’s time…

I wonder if we can see it down to single digits CENTS by that point? I’ll post again later…

22

Yep! Here we are, 19:15hrs with the official crude conract expiry @ 19:30…

The settlement looks like it is going to be…

…

3 cents per 42 gallon barrel.

Single Digit - it IS then!..

Here’s the chart…

Whoever is long of this contract investment-wise - has just been killed on the market…
NO ONE wants to take delivery of Crude Oil!!!

This bit is like that final scene of “Trading Places” when the market has finished at .29, our heroes have made around $4million between them, and the villains - the Duke Brothers are begging for the machines to be turned back on, so they can cut their losses… NO DICE! There’s no buyers out there. The only buyers are those who can actually use a barrel of crude - to refine it.
Bugger going all the way to Oklahoma or Texas to get it.

Meanwhile, back over here in Blighty - we’re still paying through the nose for OUR Brent Crude oil, because it’s price includes delivery to wherever the buyer wants it…

Still around $22 for a barrel of Brent…

$0.03 Per Barrel - Last Trade 20th April 2020.
You read it here first!

There will probably be an obituary for WTI crude on the late night news tonight…

…Or you can tell your Greenie Chums - and they might just be wanting to touch themselves over such “■■■■” as the chart linked above… :open_mouth: :open_mouth: :open_mouth: :open_mouth: :open_mouth:

23

Crude Oil - if you’re stuck with it at the expiry that just took place at 19:30 GMT… (full settlement is tomorrow, Tuesday at which point delivery has to be made and taken

You’ve now got to PAY $35.20 for someone else - ANYONE else - to take it OFF you.

The last few trades that go through “just after the official market close” - can be at any price two people will come together and trade at.
People that “had to get out”, vs those short this market who want to squeeze every dollar out of the losers they possibly can…

Short Positions - make the price they originally shorted at, Eg. $17.00 this morning, and now buy out their short contract @ today’s last “after settle” price of -$35.20

making each single short position a nice $52,200 dollars less around $25 commission.

If you went long of ONE single May crude contract at $17.00 this morning - then congratualations - you’ve just LOST $52,200

The news of “Crude goes negative for first time” are now starting to appear…

https://www.bloomberg.com/news/articles/2020-04-19/dollar-steady-with-further-signs-of-virus-easing-markets-wrap

https://marketinsider.net/with-crudes-bloodbath-energy-stocks-also-head-south

Maybe I should consider getting a job at the FT…

24

The price dropped to…

Wait for it… minus $37.63 a barrel briefly today!

Bet it’s still over a quid a litre at my local Shell though.

25

Radio 5 reporting oil is at minus terriorirty for 1st time ever.
Basically to much oil being produced. Lot.of country’s in lock down no cars on the roads .
No planes in th air.
Demand is at all time low.
Storage space has run out.

And.oil company’s are basically giving it away to anyone with storage space.

26

Now the June contract is the “front month”.

Between now and the June contract expiry, 4 weeks away - I imagine a similar thing will happen to THAT contract, making it a kinda one-way bet to go short @ around $21.00 per barrel - expecting it to go down to zero in the next 4 weeks as well…

There’s no way we’re going to be out of this lockdown prior to that - surely?

I wonder if China are going to send an entire fleet of Oil Tanker ships in to the texas oil terminal - to take away as much as they can for as little spent as they can - WHILST they still can!

…I’d expect a world embargo on Chinese Shipping in particular, as a “punishment” before long…

The rest of the world’s shipping magnates?

They’ll just send in whatever they’ve got - to get the freebie Oil, I would imagine - just to free-up the pipeline, if nothing else!

27

A propos of not much,an american friend tells me that he is paying a few cents over 1 USD/per gallon.Even allowing for difference in volume between their gallon and ours,that’s one hell of a price difference.
When the greenies get over their ■■■■■■ over the lack of road vehicles how long before they complain about the amount of horse crap in the streets as we ride to work in a few years?

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  1. 14 Euros here in our equivalent of Tescos, Asda
29

Guy on 5 live wake up to money, explained fuel with present tax regime will not be below 73p per litre.

If petrol cost 1p p/l add 60p fuel duty and then add 20% vat it adds up to 73.2p p/l.

So add operating costs on top and there isn’t much wiggle room left, my local Sainsbury’s was £1.02 last night.

30

Sixties boy:
Guy on 5 live wake up to money, explained fuel with present tax regime will not be below 73p per litre.

If petrol cost 1p p/l add 60p fuel duty and then add 20% vat it adds up to 73.2p p/l.

So add operating costs on top and there isn’t much wiggle room left, my local Sainsbury’s was £1.02 last night.

Exactly.

The part of fuel that is affected by market forces is tiny. The vast bulk of it is fixed duty (and essentially fixed VAT on that duty) that won’t budge. Then you’ve got VAT on the fuel part too.

31

My local fuel station is selling for the equivalent of 47p per litre for basic fuel and 98 (v power) around 60p a litre … cheaper than milk which is $1.25 a litre … 72p

32

discoman:
My local fuel station is selling for the equivalent of 47p per litre for basic fuel and 98 (v power) around 60p a litre … cheaper than milk which is $1.25 a litre … 72p

Where’s that roughly?

33

toonsy:

Sixties boy:
Guy on 5 live wake up to money, explained fuel with present tax regime will not be below 73p per litre.

If petrol cost 1p p/l add 60p fuel duty and then add 20% vat it adds up to 73.2p p/l.

So add operating costs on top and there isn’t much wiggle room left, my local Sainsbury’s was £1.02 last night.

Exactly.

The part of fuel that is affected by market forces is tiny. The vast bulk of it is fixed duty (and essentially fixed VAT on that duty) that won’t budge. Then you’ve got VAT on the fuel part too.

Let’s see forecourt retail prices down to the 80-90p range in short order then… An honest profit margin there, and the government is still able to take that full tax amount out of it.

Meanwhile, the June Oil Contract for WTI which closed at $21.00 for delivery NEXT month - has already fallen to $12 this morning, bounced back up to $17, and is now as I write this “trying to stablize at these levels”. The next leg up or down will likely take place between 13:00 and 14:00 GMT this afternoon when the main NYMEX crude trading pit opens in the States…
Plus you’ve got Saudi Arabia panicing that their entire incoming stream is about to collapse - no WAY they can afford to pay everyone $37.20 or more to take each and every barrel of crude off them at their terminals!

They’ll probably be dumping the june contract, and all longer dated ones as well - with the intention of shifting as many barrels off their stockpile as they possibly can - at any positive price they can get.

$17 per barrel - looks a GREAT sale price if your sitting on millions of barrels lying out there in the sun on pallets, eh? :bulb:

I can’t see Crude Oil being anything bar “Toxic Waste” now all the while this lockdown continues…

34

Petrol and Diesel down from 70c to 60c today…

I reckon Forecourts might want to cut their prices to sell out of their current bunker stocks in time to order some super-cheap re-fill in about a week’s time…

Eg. if you’re a private forecourt currently charging 109.9 for unleaded, then there are supermarkets nearby charging around 102.9, so sales are going to be s.l.o.w…

If private forecourt now cuts to 99.9 - that is only 3p cheaper to undercut the supermarkets, BUT such a price is a big headline grabber, and the world will soon be out that your fourcourt - is the cheapest in town, AND the first to cut to below a quid to boot!

I’m a bit more worried by the rises in the Natural Gas market however, although hopefully it has warmed up enough so that we won’t need to use as much gas at home now.

Electricity prices - are already up sharply, and with loads more of us using power at home during the day than usual - the Electric companies will be absolutely coining it in at our expense. :frowning:

35

Winseer:
Electricity prices - are already up sharply, and with loads more of us using power at home during the day than usual - the Electric companies will be absolutely coining it in at our expense. :frowning:

I’m not buying…

Their lies (but I’ll still have to pay their ransom demand). Of course home consumption has risen but in exact proportion to the drop in demand for workplace electricity. It’s the same number of people just in a different place.

36

The front month June crude contract has fallen from $21 this time yesterday to a low of $6.50 today before bouncing back to $13 by the main market close.
Crude “cash” for immediate collections - is still trading in negative territory, although there have been some trades at positive prices throughout the day.

I guess anyone in texas with a small barn on some of their own land - is sending around a pickup truck to collect a pallet with 4 barrels of crude on it, and being paid $100-ish to take if off the Oil Terminal’s hands…
Have we Brit Truckers done something similar with Europallets that sometimes we get offered hard cash for, and at other times our bosses get the hump if we accidentally fork one to bits, being told “Hey bud, that’s a tenner out of your wages there!!”

Petrol and Diesel ended up down 13c today to 79c/USgallon and 59c/USgallon respectively.

37

Well I’ve just done my bit to keep a local oil company’s driver busy; heating oil at 23.20p/litre. It wasn’t that cheap when I moved here in 2003.

Can’t see it dropping any lower or it won’t be worth them delivering it; and recent reports of Donald Trump’s sabre-rattling should push the price back up.

I’d held off buying heating oil due to considering a house move; but now this crap’s kicked in I can’t see me shifting for another year at least, so may as well fill me tank up while it’s cheap.

Price was from Boilerjuice BTW if anyone else is considering buying.

38

This slump is different… I don’t think Oil nor Saudi Arabia are coming back from this…

Russia and America on the other hand - have external industrial bases to find a new use for “Oil” as a material for future R&D I’d suggest…

Perhaps the increasing of refining capacity and power stations that burn those distillate products of those refineries…

Would work nicely towards any “Protectionist” economic policies huh?

If a superpower has electricity as cheap as chips - it can go on to build an entire spacefaring industry on the back of that…
Saudi Arabia though? - Has nothing else beyond it’s petrochemical industry.
The UK and other nations selling weapons to Saudi Arabia will lose out - but here too in Blighty - we can diversify our own industries to make use of this new material that we now have in abudance…

How long does it take to build an Oil Fire Power Station compared to a nuclear or some “Green” facility?

Also, the Chinese polymer industries - might get cheaper in raw material input costs BUT we’re also going off plastic at a rate of knots around the world at the same time!!

China - is finished as well then.

A great opportunity for the rest of the world to default it’s debts- most of which are already owned by China, especially consumer debts…
Why sue China over Coronavirus when we can just refuse to honour the western bonds they already hold?

“Flip the bonds over to nil-coupon undated paper”.

We don’t need to ask for bailout funds - we’ll be able to TAKE them!!

Possession is nine-tenths of the law. If we’ve already borrowed the money from China, then if we refuse to pay that already current outstanding debt back again - that’s like borrowing the same money all over again!

39

Nice little earner in America - for those who got paid last month to take some barrels of oil away from the Cushing Terminal…

Sit on some barrels in your barn for a month since - and hey presto - you can sell them on the open market again for $30 once more!

Ok, taking say, four barrels away on a pallet for a payment of $100 from the terminal - isn’t going to make you rich…

But it’s free money that $120 you can get now, and who knows? maybe another $10 for the pallet as well!

Good luck to all those who participated in the “Great Oil Clearout” last month. :slight_smile: