Negative Oil Prices

[Munroast]

It's simple really.Recently Russia and Saudi had a battle. Russia started selling oil at a reduced price. I noticed the drop in the price at the pumps. Russia did it by producing more so price fell. They shook hands and then agreed a limited production. Price then goes up. Looks like less than it was earlier at the moment but it can take a time to work through.

So lockdowns all over the place, no one buying fuel so way too much around to sell and price falls. So store as much as possible and probably fill every tanker on the planet and leave it at sea.

There aim usually is to produce just enough for demand which keeps the price more stable and OPEC sets that price. The USA did just produce for themselves. Not sure what they do now.

Crazy, what - but that in some ways is how a number of things work.

so they could reduce production immediately if they wished, but can't agree who should cut production?

 

[fillyboy]

China recently bought a shedload off Russia at a knockdown rate (might have been pre covid), they're probably ramping up storage facilities now to take advantage of the price but if everyone is still producing and no one is buying, strange times.
I'm kicking myself that I filled the van up just before the lockdown.

 

[mattylad]

So has the price of petrol actually fallen to match the low cost of the oil?

Doubt it. (not that I have been to a petrol station in a few weeks)

 

[Brigadier]

It's been stable for the last few weeks at the forecourt up the road.
104p for petrol, and 110p for diesel.


Crazy, when you think it was almost 150p not so long ago....

 

[ajohn]

Diesel price went up as usage in the UK increased. The excuse for it is that our diesel production facility is running at full capacity. It was and should be cheaper than petrol. Personally I think it's also been increased due to the increased efficiency of diesel engines. Eg since I have used them circa 30 to circa 50mpg. Or even more in some cases. Chances are they could be even more efficient over time and cleaner. I started using them because they are way better for caravan towing especially in respect to consumption. Curiously a labour politician when asked about banning diesels said no - use technology. Diesel is fundamentally more efficient than petrol. The early turbo cars just used a lot of it. Quick fix.

When they were fitted with catalysers some makers were saying no fit a separate tank of urea instead - that's what VW and some others did to help with emissions under certain conditions. The urea tank would have been rather larger but not much is needed. Mine doesn't use one. End result is a low rev turbo charged engine where peak torque is well down the rev range much like diesels used to be long ago. Not the sort of thing VW and others produce. Mine uses some interesting engine management technology. Net effect is if in a rush I need to get through the gears rapidly.

It's similar to when cats went on petrol. The industry had been doing a lot of work on lean burn and getting very close to the same emission levels and wanted to continue. Gov said no fit cats. Lean burn means less fuel used. Honda stuck a car out that would do over 100mpg using various technologies, Supposed to be what would be used for some time.

Problem with cats is keeping them working - easy dump more fuel down them and it burns the contaminants off. It can be used to gain a lot more performance as well.

 

[IT Minion]

The price that's being quoted is the price for oil to be delivered in the future. That means that it gets used for speculation, ie betting on the price going up or down. At a certain point in the month it ticks over to the next month. At that point if you're just speculating then you really don't want to have any left as in a month or so a tanker will show up on your doorstep asking you where you want this oil.

What I believe happened is that some people had some oil futures they really wanted shot of and waited too long. To the point where they wanted rid of it so much they paid other people to avoid having it dumped on their lawn.

 

[JohnD]

Diesel

That's funny, you totally failed to mention the health effects of particulate emissions.

 

[SirGalahad]

Some Speculators took a hit. Thats the nature of the game.

 

[Deleted member 18243]

take it without the barrel and just burn it - in fact why don't the oil ginats just do that, pump it into a lake and set fire to it. Surely they're not scared of annoying Greta.


But getting back to my original question, is it not possible t just stop it coming out of the ground ? can they just not turn the tap off for a bit, is it just more complicated than that and if so, how?

Sometimes it comes out under its own pressure, sometimes it has to be forced out. In the distant past, before humans used oil, it bubbled out of the ground freely in many places. The sites where it comes out under its own pressure eventually lose that pressure as the oil becomes depleted, and then it has to be forced out. Different types of oil are found; heavy, light, sweet, sour, chicken chow mein etc.

Oil production is a dangerous business, the boys working in that industry are "front line heroes" too.​

I recommend the book "Twilight In The Desert" as a good overview of the history of oil production; the technical side of it and the politics that goes with it.

https://www.amazon.co.uk/Twilight-Desert-Coming-Saudi-Economy/dp/047173876X

 

[fillyboy]

This is a great read andy if you're into oil.

https://www.amazon.co.uk/Prize-Epic...words=the+prize&qid=1587500104&s=books&sr=1-1