Oil now cheaper than beer

[diablo]

A barrel of oil is now cheaper than a pint of beer!

 

[newguy]

At this rate, Wetherspoons will soon have it on tap..

 

[Murray]

How can one, if possible, profit from these lows?

 

[newguy]

How can one, if possible, profit from these lows?

Could always buy stocks in oil companies under the assumption that eventually the only way is up

 

[Murray]

Could always buy stocks in oil companies under the assumption that eventually the only way is up

I have stocks in Shellb, Chevron and Exxon

They're only 5% down on the day though (the US ones), nothing drastic

If they drop more I will buy more

On Etoro it says oil is $21 somehow - https://www.etoro.com/markets/oil

USO is $3.76 - https://www.etoro.com/markets/uso

 

[newguy]

I have stocks in Shellb, Chevron and Exxon

They're only 5% down on the day though (the US ones), nothing drastic

If they drop more I will buy more

On Etoro it says oil is $21 somehow - https://www.etoro.com/markets/oil

USO is $3.76 - https://www.etoro.com/markets/uso

Oh yes of course. Yes that tends to be a common move, to top up in bad times. 5% is still quite a reduction, but I see your point. It doesn't seem like its capable of going much lower!

 

[diablo]

Oil futures are $22

Depends what futures you are talking about.

US oil futures trading below zero. Sellers have to pay buyers to take it.

https://www.wsj.com/articles/why-oil-is-11-a-barrel-now-but-three-times-that-in-autumn-11587392745

 

[diablo]

How can one, if possible, profit from these lows?

Buy a few barrels and keep them in your shed

Remember this is oil, not oil shares.

 

[martin-s]

Don't forget that there are lots of types of oil. How and where it is produced and stored makes a big difference.

 

[Murray]

Buy a few barrels and keep them in your shed

Remember this is oil, not oil shares.

What about USO?

I created an overlay of USO price vs Oil

https://cabotwealth.com/daily/etfs/3-oil-etfs-to-buy/

USO is the best pure-play fund that tracks crude oil prices; it’s the largest, most liquid of futures-backed oil ETFs, with 28 million shares exchanging hands daily and roughly $1.4 billion in assets. Over the past five years USO has had a 0.96 correlation (1.0 is the highest) with crude. That’s a bad thing now – USO is down 45% year to date. However, when oil prices finally bottom, this is the purest way to buy the rebound.

 

[websaway]

Can our government prop up the capitalist system that currently exists as it did in the Banking crisis. Branson looking to borrow half a billion from the taxpayer and is offering his Island as security. Should he have maybe not bought the Island and kept the liquidity for a rainy day. Can the mega rich now retain their own private wealth by holding the country to ransom on jobs.

 

[websaway]

second thoughts he bought his island for $180, 000 it is now worth $ 60,000,000 should his first option be to sell the Island, he'll take a hit but is that not the same for all of us supporters of capitalism.

 

[Edwin]

USO just fell 25%. One analyst described the movement in the fund as "It's turning into one of the great incinerations of retail money of all time."
https://www.forexlive.com/news/!/heres-why-it-could-get-even-uglier-for-oil-20200421

 

[bonusmedia]

USO just fell 25%. One analyst described the movement in the fund as "It's turning into one of the great incinerations of retail money of all time."
https://www.forexlive.com/news/!/heres-why-it-could-get-even-uglier-for-oil-20200421

The idea that what goes down must come up again is really no better than the gambler's fallacy.
Normally when folks start saying 'this is a new paradigm' it's a sign that the trend is about to reverse. Now, who knows?
That's the thing about conventions, they're always right until they're not.

 

[dee]

USO just fell 25%. One analyst described the movement in the fund as "It's turning into one of the great incinerations of retail money of all time."
https://www.forexlive.com/news/!/heres-why-it-could-get-even-uglier-for-oil-20200421

just bought a small amount. No leverage so would need to go to zero (which is possible !)

 

[ian]

The dump as a result of cancellation of May contracts; we are now in June/July contracts but I'm not convinced we'll see a recovery for quite some time. Those companies/industries with the ability to store will be stocked up nicely now (and paid for it); they won't be buying again for a while!

 

[diablo]

One positive: cheap oil will help the post-covid economic recovery.

 

[Murray]

I was looking at USO but couldn't seem to find what the fees for an ETF are so until I fully understand what I'm doing I will leave oil alone other than shares in Shell etc, all though I'm sure there's money to be made there someway or another

One positive: cheap oil will help the post-covid economic recovery.

and so the door opens to turn this into a new corona thread..

 

[diablo]

Oil won’t help post corona. Oil still cheap so the money will still be lost forever

Of course cheap oil would help an economic recovery. The world runs on oil.

 

[websaway]

Not individual bashing but according to reports Branson bought his island in 1978 for 102,000 it was on the market for 4million a year earlier. Those of course were in the days when recessions were a shake out not an opportunity for the rich to get richer. Cash could well be king. The guy who won 50 million on the lottery last week could well pick up a bargain. What's good for the goose after all.