Posted on 03/16/2020 2:57:36 PM PDT by bananaman22
As markets brace for yet another week of total liquidation (even gold fell below $1500), oil drillers are preparing for the worst.
Last time crude traded this low, back in 2016, U.S. oil firms entered survival mode, slashing costs, cutting jobs and optimizing drilling processes. But this time, there’s not a whole lot left to cut.
The 2014-2016 oil price crash happened gradually, over the course of several months. 2020’s crash happened in just a few weeks and could end up being a lot more destructive.
IHS Markit expects the ‘largest-ever oil glut’ to be between two and four times bigger than the 2015-2016 glut of 360 million barrels. All of this is happening at a moment that global crude demand is tumbling. Analysts even believe that the current drop in oil demand will turn out to be the most dramatic decline in history.
(Excerpt) Read more at oilprice.com ...
My new car runs on COVID-19.
Remember Peak Oil?
funny how russia and saudi pick this time to have a price war on oil.
I think that the oil issues have been going on a while.
Maybe they could use this downtime to replace some of those
gasoline refineries that in recent years have been destroyed by “mysterious” fires.
So destructive I paid $1.79 for gas and got a hell of a bargain on stocks as well.
I am thinking that the price may go up if the supply line is interrupted by travel or staffing problems. This could happen anywhere from the workmen who pump the oil out of the ground- To the refineries- And so on. Hopefully it won’t come to that.
Yes, I do remember peak oil. It had a lot of convincing arguments to support it, but ... I wonder if we will end up saying “remember that Corona virus scare”, at some time in the future.
if anything keeps the world from self destructing —it will be historically low oil prices.
With wholesale gasoline now much cheaper than ethanol, time for POTUS to issue an executive order eliminating mandated ethanol in gasoline. Make E0 great again!
It might be a bit early to be buying stocks.
Don’t expect gas prices to stay at sub-$2 levels. States will likely jack up their gas taxes figuring that people are used to high prices by now.
It is one thing to have a hurricane destroy a single city or ever a region, but to have an entire country come to a screeching economic standstill is beyond anything we have ever experienced.
Restaurants empty, city streets empty, vacation destinations empty, stadiums/coliseums empty, schools closed, people self-quarantining, church services cancelled...
It will take a week before we really begin to see the impact, but once it starts, it will gather speed and mass like a snowball.
If it ends in a few weeks, we can all emit a huge sigh of relief...and get back to work to mend and repair the damage.
But if it drags on?
I am an optimist by nature and remain optimistic here as well. But, in the words of crazy Uncle Joe Biden, this is potentially "a big effin deal."
A lot depends on timing.
Here in Indiana, the legislature is adjourned until Jan 2021. I don’t see our Republican governor calling a special session to raise the fuel tax.
Having a hard time appreciating the MSM logic of cheap oil is bad for the market and US economy.
This shows why it’s so unhealthy to try to become “energy independent.” It’s terrible for everyone involved.
It’s far better to not drill and pay Russia and OPEC whatever they want.
Right?
Given all the business closures and even national lockdowns worldwide, this oil price “war” between Saudi Arabia and Russia is immaterial as prices were headed to the basement anyway. The US just needs to make certain that domestic production is not damaged, that they’re up and running as soon as conditions warrant. I’ll leave the how to other, more informed individuals but do not allow our newfound level of independence to slip away under any circumstance.
Social distancing - I think my mini vacation this spring will be to go walk a bunch of the civil war battlefields. Road trip!
Trump needs to issue an EO declaring such predatory taxation profiteering and ban it under emergency powers.
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