
I tried to buy an actual barrel of crude oil (2015) - pjc50
https://www.bloomberg.com/news/articles/2015-11-03/that-time-i-tried-to-buy-some-crude-oil
======
dublinben
NPR's Planet Money also bought some oil:
[https://www.npr.org/sections/money/2016/08/26/491342091/plan...](https://www.npr.org/sections/money/2016/08/26/491342091/planet-
money-buys-oil)

~~~
duxup
I think Planet Money also bought a mortgage backed security a while back when
things had already gone south.

They tracked the houses involved and their history.

It was interesting to see the investment tied to specific homes, and etc.

~~~
NikolaeVarius
Also a junk/high-yield bond [https://www.npr.org/2020/02/19/807544557/meet-
our-junk-bond](https://www.npr.org/2020/02/19/807544557/meet-our-junk-bond)

~~~
wefarrell
Schwab allows retail investors to buy junk bonds. I bought one a few weeks
ago.

~~~
kart23
Really? Care to share your experience/details?

~~~
wefarrell
Sure, I bought a Delta Airlines bond with a 3.4% coupon for 93 cents on the
dollar due in a year from now. Provided Delta doesn't go bankrupt in a year I
will make 10%.

They have a pretty healthy balance sheet compared to their peers and I don't
expect the government to let the sector fail in such a way that bondholders
get wiped out.

~~~
TomGullen
I would of thought holding Delta stock would have more than 10% upside if they
don’t go bankrupt

~~~
IAmGraydon
He’s not talking about stock, and you’re right - their stock would have a far
greater return. Potentially over 100% within a year.

~~~
throwaway373438
But also far more likely to go to zero.

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cbanek
Well, this aged well:

"The story of how I came to own physical oil begins in late 2008, when fallout
from the financial crisis spurred the crude market into severe
contango—meaning the price of oil for future delivery was higher than the
expected price of immediate “spot” delivery. While contango is the usual and
persistent state of the oil futures curve, this particular "super" version
helped create the perfect conditions for an almighty oil storage trade as the
price of crude for future delivery vastly eclipsed the cost-of-carry and
storage expenses of petroleum bought in the spot market."

This is exactly where we are now, only the prices are much lower and the
demand even weaker?

I remember reading this the first time it came out. Only better the second
time.

~~~
betterunix2
More or less, though it should be pointed out that the negative prices
yesterday were for futures contracts that trade in 1000 barrel increments
(roughly a railroad tank car) and not some tiny amount (like a blue barrel).

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gglnx
Back in school (around 2006) I asked the PR department of German BP for a
small sample of crude oil, that I need for my final assignment. A few weeks
later I've got large glass bottle (I think maybe over a liter) of crude oil.
The package needed the signature of my mom because it was a dangerous goods
transport. I think the shipment was for BP more expensive than the Russian oil
itself...

------
dang
Discussed at the time:
[https://news.ycombinator.com/item?id=10499297](https://news.ycombinator.com/item?id=10499297)

Edit: Such links are simply for the curious. Reposts are ok after a year:
[https://news.ycombinator.com/newsfaq.html](https://news.ycombinator.com/newsfaq.html).

~~~
kryogen1c
have you considered some kind of presubmission check for this? even just to
inform users without actually screening, and then auto appending previous
discussions if submitted?

~~~
dang
Yes but it's not clear how to get it right.

~~~
jedberg
If you auto merged the comments from the last time, in theory they would
quickly fall to the bottom because their time based value would be so much
lower than the new stuff.

Maybe also disable replies to old comments and make them a different color?

To be fair, we could never figure out how to get this right on reddit either,
but HN has a better comment sorting algorithm than reddit so it might actually
work here.

~~~
jefftk
Why do you want to discourage replies to old comments?

~~~
jedberg
Because the people who made the comments won't know that someone replied since
HN doesn't have a notification system.

~~~
saagarjha
Not a Hacker News feature, and probably not new to many here, but some might
find it useful: [http://www.hnreplies.com](http://www.hnreplies.com)

~~~
jedberg
That was new to me, thanks!

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econcon
I actually love buying stuff which is not easily available, this has given me
many ideas of starting new business of which a few are successful now.

Sometimes it's hard for someone within a system to conceive an idea which is
obvious to the outsider and yes there will be many naysayers but if you know
your idea can create value, you'll profit.

~~~
vcanhoto
Could you give an example? I understand if you don't want to though.

~~~
boldslogan
construction comes to mind, equipment, materials, things usually sold only to
companies. that would be interesting...a small crane shipped to your cottage.

------
scurvy
Considering that the front-month oil contracts went negative today (paid to
buy a barrel of oil), I think more (well funded and adept) players will try to
hastily arrange more storage facilities. There's just no place to put the
stuff right now.

It's quite difficult to turn-off an active well. Deep-water wells are all but
impossible to stop.

~~~
jofer
Actually, deep water wells are usually quite easy to shut in by design. They
frequently need to be shut in due to hurricanes or infrastructure maintenance.
You don't drill a $100 million deepwater well without all the bells and
whistles.

Very cheap wells with low production (onshore, say ~10 barrel per day) are the
ones that tend to be difficult to shut in, as they're not designed for easy
temporary shut-ins.

That having been said, most of the "must produce" issues are contractual.
There are plenty of contracts with production quotas/etc. Similarly, pipelines
need a minimum volume to keep flowing, and once they're stopped, they can be
difficult to start again (inspections/etc, as well as physically starting
things flowing).

~~~
D_Alex
ALL wells, including the "very cheap wells" are easy to shut in, by design. It
is an essential safety feature, mandated by all relevant codes, rules and
regulations.

SOME wells can be a little difficult to _restart after a shut-in_. This
includes, for example, offshore wells which extract waxy crude - the crude can
simply solidify in the pipe if allowed to cool down to ambient temperature.
See link below. This is usually not a big problem for a planned shutdown, as
the facility will take measures to prevent such a situation (eg flush the
pipes with diesel right after shutdown).

I suspect the problem might be more difficult with some pipelines, as these
may be impractical to flush.

[https://www.khavaranparaffin.com/articles/161-wax-
problems-i...](https://www.khavaranparaffin.com/articles/161-wax-problems-in-
production-of-oil-and-gas.html)

~~~
jofer
Yes, any well must be able to be shut in. I phrased that poorly. What I meant
was that not all wells respond to a shut in in the same way. It's not uncommon
for things to take months to recover to the same production levels after a
shut in. (At least for conventional wells -- unconventionals are significantly
different.)

(Major caveat here: I'm an exploration geologist who later went into remote
sensing, so my knowledge of actual operations is pretty spotty. Feel free to
ignore me on this, but I'm going to keep rambling anyway.)

I was referring to a lot of onshore wells in declining or very small
conventional fields. In many cases, a shut in that lasts for more than a few
weeks basically leads to a P&A, as production won't recover without a
workover, and a workover isn't worth it. That's what I meant by "not designed
for it" \-- production is expected to be sub-par after a shut in and a
workover was never in the plans. A shut in means a death sentence for some
wells, so operators prefer to keep them trickling along when possible, as it
leads to a higher EUR. (Also most of these are hooked up to stock tanks, not
production gathering pipelines, so it's a bit of a different world.)

However, I'm extrapolating from the very little experience I've had with that.
Literally one tiny onshore field in TN (yes, Tennessee) that I worked in/with
15 years ago a summer after undergrad (I was actually mostly collecting
seismic with a tiny source and a short string of geophones from the back of a
pickup truck, so not terribly closely related). I may very well be way off
base.

------
anonobviosly
This reminded me of the opposite story:
[https://thedailywtf.com/articles/Special-
Delivery](https://thedailywtf.com/articles/Special-Delivery)

Tldr- commodities trader accidentally specified physical delivery for several
thousand tons of coal; very surprised when the barges show up at their
waterfront office.

~~~
smnrchrds
I think the story is fiction. I don't think commodities are sent wherever your
office is. Isn't the location of delivery set as a part of the futures
contract?

~~~
juped
Yes (e.g., if you buy CL futures, delivery is in Oklahoma).

QL coal doesn't trade anymore (all the active coal futures I can find now are
cash-settled) but delivery seems to have historically been at the discretion
of the parties, so the story is at least plausible.

~~~
542458
Everything I’ve read seems to say it’s very, very difficult to accidentally
take delivery, but it’s not quite impossible.

In related news, there is a Planet Money Podcast (episode called the Eddie
Murphy Rule) where they interview the trader who took possession of a bunch of
cattle by mistake IIRC.

~~~
juped
If you're a normal retail trader, your broker will probably intervene before
then.

------
simlan
Thanks for sharing. That was a fun read from an unexpected source.

~~~
tanderson92
Not so unexpected: Tracy Alloway is one of the hosts of a jointly very-
entertaining and highly-informative podcast by Bloomberg, Odd Lots.

------
neonate
[https://archive.md/BEiM0](https://archive.md/BEiM0)

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fortran77
The barrel may be worth more than the oil!

~~~
betterunix2
In a sense, yes, that is what a negative price for oil means: the barrel is
more valuable as a place to store oil than the oil being stored.

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LoSboccacc
the fun part of the story is he was paid three quarter of dollar in bitcoin so
he should now be a millionaire

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_fs
[https://outline.com/meyY6X](https://outline.com/meyY6X)

~~~
damian_
Outline.com is intellectual theft of someone else's IP and their right to
monetise it. Would we accept this in any other domain than content?

~~~
OJFord
I don't think there's any opportunity cost to Bloomberg here, nobody
freeloading on this site would otherwise be buying a subscription, I shouldn't
have thought.

