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$UWT and $DWT were de-listed 3/19 (3x long and inverse on oil). It would still be surprising, but I wouldn't as surprised at this point. This next month will be

by gen3 6y ago

$UWT and $DWT were de-listed 3/19 (3x long and inverse on oil). It would still be surprising, but I wouldn't as surprised at this point. This next month will be hard on $USO. At this point oil stores are reaching maximum capacity, with any free space going for a premium. I think that the squeeze at the end of the month has shown to a lot of people that if you don't have storage room for oil, its a liability. Good for you if you have a ton of empty storage though!

woliveirajr 6y ago
All ETFs are a kind of bet ok some real-world good. (on virtual too? Now I'm not sure) No bet has good/amazing returns if there's no risk. No matter how remote it is, to be safe you sacrifice some profit. When you don't protect yourself for those remote risks, _if_ they bite you, it hurts real bad.
- gen3 6y ago
  Totally! My understanding of the current situation is that the market wanting more oil has shrunk considerably. Investors were stuck with the chance of having to actually receive the oil they had contracts on, and did all that they could to get rid of it. This compounded and squeezed the price so low. I'm not sure how many people planned for oil to ever go under zero. I think that many people are going to be eyeing the current storage level (and consumption!) and deciding that the risk (and cost) of having to settle a shipment might not be worth it. But I don't really know ¯\_(ツ)_/¯
  - debian3 6y ago
    Where can you see storage level?
    - schoen 6y ago
      https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_YCUOK_w.htm https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_YCUOK_w.htm is relevant (but doesn't show the actual capacity limits). https://www.eia.gov/petroleum/storagecapacity/ https://www.eia.gov/petroleum/storagecapacity/ mentions the actual capacity limits from last September. It sounds like Cushing, Oklahoma, had 76,093 thousand barrels of total storage and 59,641 of them were used last week. But that's been increasing sharply and might be much closer to the total right now. 59,641 thousand barrels isn't the highest amount that's ever been stored there, but it's getting close: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W... I don't know how to get more current data, but I just found this through some web searches, so I bet there's much more information available.
    - kthejoker2 6y ago
      In the US, the EIA provides info on stockpiles: https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf But in terms of total capacity, it's tricky, because you can turn the tankers that currently transport oil into floating stores, convert water tanks, salt mines, and other storage media into petroleum storage, etc. We're probably at about 60% capacity or so here in the US, we haven't even filled up the SPR yet.
      - SlowRobotAhead 6y ago
        Help me understand. How does hitting 60% storage capacity result in negative barrel prices? Shouldn’t that be a 99% scenario?
        loopz 6y ago
        The capacity is mainly for new oil not for the trading of it.
        ars 6y ago
        The capacity is already "purchased", so even though it's available from a physical point of view, from a monetary one you need to pay a lot. That amount you need to pay to rent storage is the cause of the negative barrel prices.
        kthejoker2 6y ago
        The price of the oil is based on what someone is willing to pay for it (QED.) Right now, nobody wants to buy the oil to actually use it. So the only buyers are people who are willing to store it now, in order to sell it later when the price is better. Those people are "pricing in" their costs to store the oil in what they're willing to pay for it on the spot market. As storage becomes more expensive to procure (demand for it is rising, all the "cheap hotels" are sold out, etc.), the price for oil goes down further to cover those costs of storage for it. Ultimately, the negative prices are a reflection that nobody wants that oil now, and the more negative, the more a reflection that nobody is going to want that oil for awhile. So the price of oil at the moment is a function of time (how long no one will want the oil) and the available supply (and therefore price) of storage for the period of time when no one wants the oil.
j_m_b 6y ago
Would $USL be a better investment? I've noticed it tracks with the price of oil much more closely and only has to renew 1/12 of its contracts every month. I thought it would better bet for something to hold onto for a year or two and then sell when oil goes back up.
- SlowRobotAhead 6y ago
  It’s a $10 now, yea maybe it’s goes to $20 in a year but with the stockpile now, I don’t see $30 happening again soon. Not a year soon anyhow. But I have no idea, I’d happily defer to others on this.
  - revicon 6y ago
    A 100% return in a year is an amazing return on investment in my book (if you can stomach investing in fossil fuels)

by gen3 6y ago

woliveirajr 6y ago

All ETFs are a kind of bet ok some real-world good. (on virtual too? Now I'm not sure) No bet has good/amazing returns if there's no risk. No matter how remote it is, to be safe you sacrifice some profit. When you don't protect yourself for those remote risks, _if_ they bite you, it hurts real bad.

gen3 6y ago
Totally! My understanding of the current situation is that the market wanting more oil has shrunk considerably. Investors were stuck with the chance of having to actually receive the oil they had contracts on, and did all that they could to get rid of it. This compounded and squeezed the price so low. I'm not sure how many people planned for oil to ever go under zero. I think that many people are going to be eyeing the current storage level (and consumption!) and deciding that the risk (and cost) of having to settle a shipment might not be worth it. But I don't really know ¯\_(ツ)_/¯
- debian3 6y ago
  Where can you see storage level?
  - schoen 6y ago
    https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_YCUOK_w.htm https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_YCUOK_w.htm is relevant (but doesn't show the actual capacity limits). https://www.eia.gov/petroleum/storagecapacity/ https://www.eia.gov/petroleum/storagecapacity/ mentions the actual capacity limits from last September. It sounds like Cushing, Oklahoma, had 76,093 thousand barrels of total storage and 59,641 of them were used last week. But that's been increasing sharply and might be much closer to the total right now. 59,641 thousand barrels isn't the highest amount that's ever been stored there, but it's getting close: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W... I don't know how to get more current data, but I just found this through some web searches, so I bet there's much more information available.
  - kthejoker2 6y ago
    In the US, the EIA provides info on stockpiles: https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf But in terms of total capacity, it's tricky, because you can turn the tankers that currently transport oil into floating stores, convert water tanks, salt mines, and other storage media into petroleum storage, etc. We're probably at about 60% capacity or so here in the US, we haven't even filled up the SPR yet.
    - SlowRobotAhead 6y ago
      Help me understand. How does hitting 60% storage capacity result in negative barrel prices? Shouldn’t that be a 99% scenario?
      - loopz 6y ago
        The capacity is mainly for new oil not for the trading of it.
      - ars 6y ago
        The capacity is already "purchased", so even though it's available from a physical point of view, from a monetary one you need to pay a lot. That amount you need to pay to rent storage is the cause of the negative barrel prices.
      - kthejoker2 6y ago
        The price of the oil is based on what someone is willing to pay for it (QED.) Right now, nobody wants to buy the oil to actually use it. So the only buyers are people who are willing to store it now, in order to sell it later when the price is better. Those people are "pricing in" their costs to store the oil in what they're willing to pay for it on the spot market. As storage becomes more expensive to procure (demand for it is rising, all the "cheap hotels" are sold out, etc.), the price for oil goes down further to cover those costs of storage for it. Ultimately, the negative prices are a reflection that nobody wants that oil now, and the more negative, the more a reflection that nobody is going to want that oil for awhile. So the price of oil at the moment is a function of time (how long no one will want the oil) and the available supply (and therefore price) of storage for the period of time when no one wants the oil.

j_m_b 6y ago

Would $USL be a better investment? I've noticed it tracks with the price of oil much more closely and only has to renew 1/12 of its contracts every month. I thought it would better bet for something to hold onto for a year or two and then sell when oil goes back up.

SlowRobotAhead 6y ago
It’s a $10 now, yea maybe it’s goes to $20 in a year but with the stockpile now, I don’t see $30 happening again soon. Not a year soon anyhow. But I have no idea, I’d happily defer to others on this.
- revicon 6y ago
  A 100% return in a year is an amazing return on investment in my book (if you can stomach investing in fossil fuels)