US Running out of oil storage...

N

Niveka

New Member
https://news.yahoo.com/us-running-room-store-oil-price-collapse-next-171025276--finance.html

This is an interesting facet of the oil crash I had not considered. Artical says that we will run out of storage capacity this spring at which point oil could go as low as $20...

On a side note, this made me laugh:
A man went to a doctor to have his p/enis enlarged. Well, this particular procedure involved splicing a baby elephant's trunk onto the man's p/enis. Overjoyed, the man went out with his best girl to a very fancy restaurant. After cocktails, the man's p/enis crept out of his pants, felt around the table, grabbed a hard roll and quickly disappeared under the tablecloth. The girl was startled and exclaimed, "What was that?". Suddenly the p/enis came back, took another hard roll and just as quickly disappeared. The girl was silent for a moment, then finally said, "I don't believe I saw what I think I just saw... can you do that again?" With a bit of an uncomfortable smile the man replied, "Honey, I'd like to, but I don't think my rectum can take another hard roll!"
 
Shoddy jokes aside this is very interesting. No storage capacity is a big turtling deal (I saved the forum bit the work and wrote that myself). That's when the glut really starts to hurt producers. Expect to see a relaxation of the laws that require US producers to sell their product domestically though that's only a half measure since the overproduction is everywhere and dumping all that extra petroleum product onto the wield market will be a BIG bad signal to traders.
 
That may not be good for our coal exports and balance of trade. I'm no economist though but i anticipate that 2015 will, as anticipated, continue to be a horrible year for the coal miners. I'll keep bunkering down.

By the way, this is a general discussion topic not a silver topic.
 
If this makes the corporate energy bond market fall over then it will be very silver relevant...
 
Niveka said:
we will run out of storage capacity this spring at which point oil could go as low as $20
Click to expand...

You could always pump it back into the ground.
 
willrocks said:
Niveka said:
we will run out of storage capacity this spring at which point oil could go as low as $20
Click to expand...

You could always pump it back into the ground.
Click to expand...

Now why would you want to do that? Not that I can fully understand the process but:

How Contango Works

In the current onshore storage market in the US, a trader can lease out 500,000 barrels of tank capacity for an extended period of time for example, let's say a year. It costs the trader $0.50 per barrel per month to store the product onshore or $6 per barrel for a year. The current futures curve has an $11 spread between the March 2015 and March 2016 contracts. If we deduct the $6-per-barrel cost from the futures spread, the trader can generate a gross profit margin of 45%.
Click to expand...

http://www.caseyresearch.com/cdd/the-new-normal-for-oil-part-2
 
phrenzy said:
If this makes the corporate energy bond market fall over then it will be very silver relevant...
Click to expand...

You are right. I think that they should move all the gold topics to the silver thread as well as silver tends to follow the gold market.
Good point.
 
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