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$1 Oil: Saudi Arabia's Attempt To Crush U.S. Shale
Oilprice ^ | Tom Kool

Posted on 04/01/2020 3:41:07 PM PDT by nickcarraway

After having crashed nearly 70 percent in the first three months of 2020, benchmark WTI prices are trying to form a bottom around $20 per barrel.

But this psychological threshold is looking increasingly shaky as global crude storage facilities are filling up at an unprecedented pace. OPEC and its partners officially ended their output cut deal today, following the words of Russian Energy Minister Novak that every producer is ‘’free to pump at will’’.

With a flood of physical crude set to hit the market, it will take weeks, not months, for global oil storage space to run out. The storage problem could grow even worse as refining capacity is coming offline due to coronavirus health risks and in some cases a (very) negative crack spread caused by a double whammy of low fuel demand and crude oversupply.

Oilprice.com’s Alex Kimani wrote on Saturday that refining crack spreads are now negative in both US and Asian markets. This means that refiners must pay for every barrel they refine into fuel, which will inevitably lead to even lower demand for crude feedstock.

The gap between supply and demand in oil markets is expected to grow increasingly pronounced this month. Trading giant Trafigura’s chief economist now expects demand for crude to fall by 30 million bpd in April as around 3 billion people remain under lockdown worldwide.

In the meantime, OPEC producers Saudi Arabia and the UAE are preparing to flood European and Asian markets with crude. Bloomberg reported that the Kingdom’s supply has now officially surpassed the 12 million bpd mark,

(Excerpt) Read more at oilprice.com ...


TOPICS:
KEYWORDS: energy; fracking; hydrocarbons; maga; oilprice; opec; saudiaarabia; saudiarabia; shale
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To: nickcarraway

Tell the Saudis we will withdraw our protection if they keep it up. They are helpless without us. An we cannot possibly get a worse government, or one more committed to hating America than the one there now.

How long will America be kicked around by a pipsqueak?


21 posted on 04/01/2020 4:00:37 PM PDT by DesertRhino (Dog is man's best friend, and moslems hate dogs. Add that up. ....)
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To: nickcarraway

Trump needs to encourage US refiners to use as much domestic oil as possible. I thought the money for filling the strategic oil reserve got stripped out of Porklus 2.


22 posted on 04/01/2020 4:00:53 PM PDT by mad_as_he$$
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To: cornfedcowboy

A shower of cruise missiles from (-insert angry oil producer here-) landing on oil terminals in SA comes to mind.


23 posted on 04/01/2020 4:00:53 PM PDT by thescourged1
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To: nickcarraway
Sorry Saudies, shale oil will still be there. There will be different players drilling, granted that. Question is, will you still be there after the dust settles and we decide you are as much an enemy as Iran?
24 posted on 04/01/2020 4:01:00 PM PDT by Chgogal (Wuhan Virus, Chinese Virus, Kung Fu Virus - Wuhan Chinese Kung Fu Virus aka CCP virus.)
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To: dp0622; FewsOrange

Yep, the domestic oil industry is getting crushed...the bankruptcies are starting...Whiting Petroleum declared yesterday:

http://whiting.com/investor-relations/


25 posted on 04/01/2020 4:02:36 PM PDT by Drago
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To: nickcarraway

I look at it differently. I can’t think of a better time for the US military to respond to an attack from Iran (just wait, one will happen) by completely destroying their oil industry. I do mean completely.

Yeah, they’ll close the Strait of Hormuz for a short time...until we blow their little boats out of the water. Oil will skyrocket to what...$40 a barrel???


26 posted on 04/01/2020 4:03:00 PM PDT by jdsteel (Americans are Dreamers too!!!)
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To: nickcarraway

The U.S. should at this point ban Middle East oil imports. We don’t need to participate in the Saudi-Russia oil supply war. Let them hurt each other while protecting our growing domestic supply.


27 posted on 04/01/2020 4:06:57 PM PDT by Wuli
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To: jdsteel

So when does the gas price at the pump rocket down to under $1.00 a gallon?


28 posted on 04/01/2020 4:07:14 PM PDT by CondorFlight
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To: Hostage

that is what is happening. the tap is getting turned off


29 posted on 04/01/2020 4:07:37 PM PDT by eartick (Stupidity is expecting the government that broke itself to go out and fix itself. Texan for TEXIT!)
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To: TexasM1A

Sadly we may wind up coming out of this with only the big players in the patch. It will be ugly and innovation will lose traction.


30 posted on 04/01/2020 4:07:39 PM PDT by mad_as_he$$
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To: TexasM1A

There layoffs will be in the thousands.
But it’s okay, because us oil and gas folks are just greedy bastards.


Really sorry to hear that. One of few bright spots of the obama economy was your sector. It’s hard to see anything postive post Wu Flu Panic. We are going to be reeling with a totally nuked economy.


31 posted on 04/01/2020 4:10:22 PM PDT by lodi90 (Flubro)
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To: Lurker
That ain't going to happen.They'll be screaming like stuck pigs soon enough because 'revenue' (tax) is drying up. There are less and less motor vehicles on the road.

I don't know what our President is thinking signing the trillion dollar deals plus handing out checks like Santa to everyone (not just us who contribute). Where is the money going to come from? Productive America is closed for business.

32 posted on 04/01/2020 4:10:24 PM PDT by LibertyWoman
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To: FlipWilson

I agree. Only oil produced in North America should be refined.


33 posted on 04/01/2020 4:10:53 PM PDT by hawkaw
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To: CondorFlight

Depends on the State. Here in PA we have almost $1 in taxes per gallon between the State & Federal take.


34 posted on 04/01/2020 4:14:04 PM PDT by jdsteel (Americans are Dreamers too!!!)
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To: LibertyWoman

campaign to the right, govern to the left.

Unfortunately, it’s the way things have often gone. But at least with Trump, there are some gains. It’s becoming a bit of a glass half empty situation but the Democrats would be rushing to oblivion three times as fast.


35 posted on 04/01/2020 4:15:04 PM PDT by Peter ODonnell ("These measures are voluntary, unless you choose to do otherwise. Then we can enforce them." (okay))
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To: nickcarraway

States like WA will still have $3.50/gal gas.


36 posted on 04/01/2020 4:15:55 PM PDT by SkyDancer ( ~ Just Consider Me A Random Fact Generator ~ Eat Sleep Fly Repeat ~)
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To: CondorFlight

Under $1.00? It’s still over $2.00 a gallon in SW Florida.


37 posted on 04/01/2020 4:15:58 PM PDT by Blue Highway
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To: nickcarraway

This is going to decimate the State of Alaska budget.


38 posted on 04/01/2020 4:17:36 PM PDT by AlaskaErik (In time of peace, prepare for war.)
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To: lodi90
Well as one of local politicians said here in east central Missouri, 'no scale of economy is worth sacrificing one human life'. I know that he must have worked on that all night long before releasing his bloviation on FB.

Look at the bright side: at least we'll be alive after cowering in place for weeks. Now, sustaining our lives, well that's going to be quite a different story.

39 posted on 04/01/2020 4:19:20 PM PDT by LibertyWoman
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To: dp0622

[The drills will stop when there is no profit margin.

Small oil companies in America are Tremendously leveraged more and more by practically junk bonds.]


The beauty of the bankruptcy process is that the assets will pass into stronger hands (i.e. the next round of stock and bond investors). There is unlimited money to finance the fracking sector. The amount of money in the next round of funding will shrink, because investors will demand a higher return to compensate for the risk, but there will be enough money to produce a huge amount of oil.


40 posted on 04/01/2020 4:20:44 PM PDT by Zhang Fei (My dad had a Delta 88. That was a car. It was like driving your living room.)
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