BarrileteCosmico wrote:It's far more contagious than the flu and it's far deadlier than the flu. The fact that you're seeing so few deaths is a testament to Germany's ability to manage the praoctive and prevention techniques that have been recommended, but to say "it's just another flu" completely ignores this. Italy/Spain/US have/will have 1.8k deaths in 2 days, not an entire month.

You also have the wrong outlook about economic impact. Corona kills both supply (no one is working in any factories right now, anywhere) and demand (can't exactly go shopping this moment). Several industries have been hit very hard (oil, air travel, hotels, restaurants, etc) and it remains to be seen whether they can recover from this and whether laid off people will be able to get back to to work.

I also think that Germany does a better job of keeping count.  In the US, because you're not going to get tested unless you have issues from covid19 requiring medical care, they approximate that only 1 out of 10 people with this infection are being diagnosed and counted.  Also, people who weren't tested for covid19 but dying of pneumonia...  are not being counted as covid19 deaths but pneumonia deaths.

I think there's a very large statistical accuracy problem going on top of everything else.

This is incredible, Oil price going negative meaning they'll pay you to take it off their hands.

Feels good to fill up the car for less than half the usual price

Pedram wrote:This is incredible, Oil price going negative meaning they'll pay you to take it off their hands.

Only if you're willing to take ownership of the barrels though, and all the logistics that implies. If you settle in cash instead of assets the price is 25ish.

Has nothing to do with Covid though, just saying.

futbol wrote:Has nothing to do with Covid though, just saying.

Ok. Demand for oil has all but evaporated due to the corona crisis so producers now produce more oil than they can store but that has nothing to do with Covid?

zigra wrote:

futbol wrote:Has nothing to do with Covid though, just saying.

Ok. Demand for oil has all but evaporated due to the corona crisis so producers now produce more oil than they can store but that has nothing to do with Covid?

It doesn't. Oil prices started crashing down about 2 months ago already when Saudi Arabia and Russia deliberately flooded the market with cheap oil. At that time football stadiums were still full and no one outside China cared about Corona.

The demand for oil has not sunken to such a degree that there are no storage capacities anymore due to it. Rather, certain countries used the Corona opportunity to create an even bigger mess. Russia did not agree to a limiting of production to stabilize the oil price. In return Saudi Arabia (who are mainly exporting oil to China and would have liked to limit production) increased its oil production by 30 % to pressure Russia (who are extremely oil dependant) who in return also increased production by 300,000 barrels per day. Instead of limiting the production as was supposed to happen, SA and Russia are playing political games (I suppose there is also interest on both sides to destroy the US fracking industry, especially on Russia's part after US tried to block North Stream in Europe by all means).

Limiting oil production according to the real world demands is not wizardry and could have been done easily. Has nothing to do with Corona. It's as if car companies would suddenly decide to overproduce + drop the prices and then you claim "see, it's because of Corona, people are poorer, demand isn't there, prices are dropping".

The way I understood the negative prices for US oil (not all oil) is that the oil has been sold in "futures", i.e. the oil has already been purchased earlier, but those who bought it have no storage left for it. If they don't accept the oil they've bought they have to pay the oil producers for reneging on their contracts. So, now those who own these oil futures are willing to pay for someone to take the oil off their hands, to avoid the more expensive penalties for failing to honour the contracts.

futbol wrote:

zigra wrote:

futbol wrote:Has nothing to do with Covid though, just saying.

Ok. Demand for oil has all but evaporated due to the corona crisis so producers now produce more oil than they can store but that has nothing to do with Covid?

It doesn't. Oil prices started crashing down about 2 months ago already when Saudi Arabia and Russia deliberately flooded the market with cheap oil. At that time football stadiums were still full and no one outside China cared about Corona.

The demand for oil has not sunken to such a degree that there are no storage capacities anymore due to it. Rather, certain countries used the Corona opportunity to create an even bigger mess. Russia did not agree to a limiting of production to stabilize the oil price. In return Saudi Arabia (who are mainly exporting oil to China and would have liked to limit production) increased its oil production by 30 % to pressure Russia (who are extremely oil dependant) who in return also increased production by 300,000 barrels per day. Instead of limiting the production as was supposed to happen, SA and Russia are playing political games (I suppose there is also interest on both sides to destroy the US fracking industry, especially on Russia's part after US tried to block North Stream in Europe by all means).

Limiting oil production according to the real world demands is not wizardry and could have been done easily. Has nothing to do with Corona. It's as if car companies would suddenly decide to overproduce + drop the prices and then you claim "see, it's because of Corona, people are poorer, demand isn't there, prices are dropping".

1. Russia and the Saudis already agreed to cut production by some amount, I don't remember by how much.
2. Obviously the pandemic is affecting oil prices in a major way lol.

Art Morte wrote:

futbol wrote:

zigra wrote:

Ok. Demand for oil has all but evaporated due to the corona crisis so producers now produce more oil than they can store but that has nothing to do with Covid?

It doesn't. Oil prices started crashing down about 2 months ago already when Saudi Arabia and Russia deliberately flooded the market with cheap oil. At that time football stadiums were still full and no one outside China cared about Corona.

The demand for oil has not sunken to such a degree that there are no storage capacities anymore due to it. Rather, certain countries used the Corona opportunity to create an even bigger mess. Russia did not agree to a limiting of production to stabilize the oil price. In return Saudi Arabia (who are mainly exporting oil to China and would have liked to limit production) increased its oil production by 30 % to pressure Russia (who are extremely oil dependant) who in return also increased production by 300,000 barrels per day. Instead of limiting the production as was supposed to happen, SA and Russia are playing political games (I suppose there is also interest on both sides to destroy the US fracking industry, especially on Russia's part after US tried to block North Stream in Europe by all means).

Limiting oil production according to the real world demands is not wizardry and could have been done easily. Has nothing to do with Corona. It's as if car companies would suddenly decide to overproduce + drop the prices and then you claim "see, it's because of Corona, people are poorer, demand isn't there, prices are dropping".

1. Russia and the Saudis already agreed to cut production by some amount, I don't remember by how much.
2. Obviously the pandemic is affecting oil prices in a major way lol.

"Already"? Their agreement starts only from next month on after flooding the market in the previous 2 months. lol

Yeah, it's affecting the market but not to such a degree that we are seeing negative prices because of Corona. Without the SA-Russia oil war the prices would be in a normal range.

You can't look at only the supply and ignore the demand. Both parts are just as important. Flights are down 95% in some instances and driving has taken a huge hit. This makes the excess supply problem worse. Still, I agree that negative prices are just a function of speculators running out of storage, but the speculation wouldn't be so rampant if it weren't for COVID19.

Negative prices are for May contracts that are due in the next couple of weeks. September oil futures contract are at $30, which is when they expect demand to recover.

Big short term hit for energy companies though.

BarrileteCosmico wrote:You can't look at only the supply and ignore the demand. Both parts are just as important. Flights are down 95% in some instances and driving has taken a huge hit. This makes the excess supply problem worse. Still, I agree that negative prices are just a function of speculators running out of storage, but the speculation wouldn't be so rampant if it weren't for COVID19.

Well put.
Of course the oil price would be low anyway (not like it just started falling yesterday) but of course the current crisis has an impact as well (and could well be the thing that pushed an already extremely low price into negative territory).

The oil issue is not attributable to the pandemic, but it is an added problem to the pandemic induced recession (that futbol doesn’t accept).

futbol_bill wrote:The oil issue is not attributable to the pandemic, but it is an added problem to the pandemic induced recession (that futbol doesn’t accept).

Actually it is.  The demand for oil has exponentially collapsed as a result of the pandemic.  For example:
-  Nobody is driving cars
-  Factories aren't running
-  China's oil needs have dropped from a cliff

The oversupply was already there before the pandemic...  but that was a $20 per barrel issue.  Anything below that threshold is due to the pandemic. That's why the May price is negative or zero while the September price is $20-$30. The big assumption here is that, come September, demand recovers some.

Naw Sports, the price drop was already well in the works with the Russia - Saudi Arabia war. The pandemic demand drop added to the oil problem. It is just an added economic problem added onto the recession that the pandemic has created. But again, all this talk about oil pricing being pandemic related or not has been raised by futbol, my Junior. He is the guy that doesn’t believe there is a recession!

Look at the numbers Bill.

Sports, I don’t believe we are saying anything different. The oil price issue was started by Russia, Saudi Arabia
And now has bottomed out due to the lack of demand. Does it really matter which was the biggest contributor to the price drop?

What I’m getting at is the recession isn’t only the oil price issue, although the price issue definitely has contributed to this recession, particularly the oil sector. Keep in mind this whole discussion of recession has been repeatedly denied by my Junior.

Oil prices would have been an enormous issue if the pandemic hadn't occurred... it's disastrous in and of itself. Combine the pandemic with the oil crisis = economic impact of disastrous proportions.

I'm struggling to understand Russia's endgame here. Their economy is very oil-dependent.