Re: The Next Chapter of the Oil Crisis: 1) The Industry Shuts Down

From: kawaga ([email protected])



There is a shortages of floating tankers to store surplus crude oil and thus
the price of rental is vry high as demand is high. There is no more space
left in the oil storage tanks and floating tankers, and hence the crude oil
extraction will have to stop.

Once the stoppage occurred, the restarting cost of oil drilling and
extraction will be very high. Most of the drilling and extracting that were
stand down will be rusty and greaseless, and even seized up altogether.



"ltlee1" wrote in message
news:18e1eb8e-18b4-4cf5-925e-[email protected]

https://www.bloomberg.com/news/articles/2020-04-26/the-next-chapter-of-the-oil-crisis-the-industry-shuts-down

"Negative oil prices, ships dawdling at sea with unwanted cargoes, and
traders getting creative about where to stash oil. The next chapter in the
oil crisis is now inevitable: great swathes of the petroleum industry are
about to start shutting down.

The economic impact of the coronavirus has ripped through the oil industry
in dramatic phases. First it destroyed demand as lockdowns shut factories
and kept drivers at home. Then storage started filling up and traders
resorted to ocean-going tankers to store crude in the hope of better prices
ahead.

Now shipping prices are surging to stratospheric levels as the industry runs
out of tankers -- a sign of just how distorted the market has become.

The specter of production shut-downs -- and the impact they will have on
jobs, companies, their banks, and local economies -- was one of the reasons
that spurred world leaders to join forces to cut production in an orderly
way. But as the scale of the crisis dwarfed their efforts, failing to stop
prices diving below zero last week, shut-downs are now a reality. It’s the
worst-case scenario for producers and refiners."

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The Next Chapter of the Oil Crisis: 1) The Indu...... by ltlee1 on Apr 26th 2020, 17:05