Excess supply has sparked a fresh dilemma among U.S. drillers, which are being asked to cut oil production as storage space fills up.
When the three-year Saudi Arabia-Russia production-cut marriage known as OPEC+ ended acrimoniously on March 6, the oil and gas world as we know it ended. For now.
The gloomy forecast will falter if COVID-19 passes quickly and the global economy recovers its appetite for hydrocarbons.
Replacement production dynamics signal hope.
U.S. oil companies are expected to reduce oil output temporarily by nearly 2 million barrels per day (MMbbl/d) as lower crude prices force companies to cut back operations, the U.S. Energy Department said on April 7.
Global electric vehicle (EV) sales closed at 2.2 million in 2019. This number is expected to drop 43% to 1.3 million by the end of 2020, according to research from Wood Mackenzie on April 8.
In a letter to regulators, Occidental Petroleum called the curtailment idea a "short-sighted" one that would disadvantage Texas oil producers against other states.
Shipments are the first from the US since March 2019.
Continental Resources executive chairman Harold Hamm says U.S. shale producers are being forced to act because of storage tank limits.
Major U.S. oil companies and industry groups are opposed to mandated cuts, which would be an extraordinary step in the United States.
Even with very high day rates, the oil market contango means that floating storage makes economic sense.
Saudi Arabia is taking unprecedented action in delaying the release of its international crude selling prices by five days, a senior Saudi source familiar with the matter said on April 5, as the kingdom and other major producers seek to halt the free-fall in worldwide crude prices.