$0 Oil

"We're going to get bloody on this one, Rog."
--Sergeant Martin Riggs (Lethal Weapon)

Crude oil is down another 40% (!) this am to under $11/barrel. Prices haven't been this low since 1999 (note that the chart below does not update price till day's end).

Collapsing in the wake of world economic lockdown, oil demand is way out of balance with supply--particularly in the US where cheap credit has funded many marginal domestic producers. These highly leveraged players had little chance of surviving prolonged crude prices below $30 much less down here close to $10.

The situation gets more desperate for marginal players by the day. Their options are these: 1) Keep on pumping oil and sell it for whatever you can while hanging on in hopes that prices recover soon, or 2) shut down and default on your loans and probably never open your doors again.

The situation has gotten so crazy that spot prices for physical barrels of crude are approaching $0 in some local markets. Why? Upstream oil supply chains are running out of storage capacity. With nowhere to put it all, buyers are less willing to take oil off the hands of producers at any price.

$0 oil. Strap yourself in for an ugly shake out coming in the oil patch.