A barrel of oil for May delivery closed yesterday at $ 0. With demand at half mast, and lack of storage, producers are forced to pay to get rid of their fuel oil. It costs less than having to stop operations. Suddenly, Bitcoin miners are wondering if they shouldn’t be running their machines on gas …
From Russia with love
Black gold is worth nothing … We are even paid almost $ 40 to get it … A barrel for delivery in June has dropped to around 18 dollars.
There are two very specific reasons for this bug in the matrix. First, containment measures reduced global demand for oil by 25%.
Second, while it would be enough for producing countries to agree to turn off the tap to balance supply and demand, Russia said Niet.
The Russian-Chinese strategy is to torpedo the American shale oil industry, which needs a barrel at $ 60 to be profitable. Igor Ivanovich Sechin, the boss of Rosnef, announced the color on April 2:
” As soon as the American shale industry is eliminated, oil will go up to $ 60. “
Moscow, the world’s third largest oil producer, refused to cut production and, surprisingly, Saudi Arabia, which was believed to be an ally of the United States … did the same …
Consequence: we no longer know where to put the oil. The tankers stand in the ports filled to the brim.
I hold you, you hold me, by the goatee…
The Americans depleted their conventional oil reserves in the 1970s and it is only recently that they have returned to the forefront. Shale oil extraction made the United States the world’s largest producer of oil in 2019 (18%) in a decade. This is more than Saudi Arabia (12%) and Russia (11%).
The objective of this oil war is to massacre the American banks forced to finance a gigantic oil extraction industry (18%) which no longer yields anything. The ultimate goal is to force the FED to print thousands of billions that will further erode the international reserve currency status of the dollar.
Indeed, which country wants to hold its foreign exchange reserves in a currency whose central bank doubles its balance sheet in a few weeks …
China hopes massive devaluation will prompt oil-producing countries to stop selling oil exclusively in dollars (this has been the case since 1975) and accept the Yuan as payment. CQFD.
Antminer, how many Watt-hours?
All Bitcoin miners are currently asking the same question: how long can you run an Antminer S9 with a barrel of oil (160 liters)?…
The price at the pump has not yet fallen, but it is probably only a matter of time given the storage problem. All the same, it has already gone down well:
So it may soon be profitable to rent a gasoline generator… and plug your Antminers into it.
- An Antminer S9 consumes 32,400 Watt-hours per day
- One barrel of oil can produce the equivalent of 1,628,200 Watt-hours
So we can theoretically run an Antminer for 50 days, h24, with a barrel of oil.
With a price of Watt-hour of electricity at 0.0001336 euros, it costs around 4.3 euros per day to run an Antminer. S9
Of course, if oil producers are currently forced to pay to get rid of their oil, that doesn’t mean you will have access to free gas. The price of crude oil represents only a third of the price at the pump, the rest being the margin, the cost of refining, transportation and taxes.
But let’s do the math:
1 L of gasoline = 10,000 Watt-hours of thermal energy (but only 4,000 Watt-hours in the form of electricity because there are large losses in an engine)
It takes 8 liters of gas to run an Antminer S9 24 hours. The price at the pump would therefore have to be halved to make it profitable to run your Antminer on gas rather than with its electrical outlet, all other things being equal (how much for the rental of a gasoline generator? …)
All that said, we are currently at the bottom of the wave. This bleak situation should not last very long. Keep in mind that even if the standoff, as well as the containment, lasts much longer than expected, we are at the top of peak oil.
We crossed the conventional oil peak in 2008. According to the IEA, even with US shale oil (which may well disappear shortly …), we will cross the global oil peak around the year 2025. The Covid-19 will only be a bad memory. Oil production will start to decrease due to a lack of resources and the price of a barrel will inevitably explode. We don’t negotiate with physics…
In any case, the fall in the price of oil will bring down all energy prices. The price of gas and electricity in general will fall sharply over the next few months, which should give the miners time to adapt smoothly to Halving. Good news because without minors, no Bitcoin…
Child of Satoshi, the alchemist who turned a cryptographic algorithm into gold.
I’m talking about monetary geopolitics, not shitcoins.