Oil prices have dropped to $20 per barrel and that is for the most expensive oil. There is cheaper oil at $10 per barrel.
Oil demand has dropped 25% as no one is driving. Companies like Whiting Petroleum are filing for bankruptcy.
The oil will still exist. Oil and gas assets will be purchased out of bankruptcy.
The COVID-19 shutdowns mean 2 billion people are staying at home, so transportation usage has cratered.
The amount of purchases and economic activity has cratered. This means less industrial activity.
Oil and gas wells and rigs are being shuttered. This process of shutting and eventually restarting has many technical issues and delays.
Norwegian consultancy Rystad Energy said oil prices could fall as low as $10 a barrel if the economic impact of the coronavirus dents global oil demand by 16 million barrels of oil a day. The analysts said on Monday it may revise its oil demand forecasts lower from next month.
The oil and gas industry is facing a year or two of global depression scale impact. This will have lasting geopolitical and global economic consequences.
SOURCES- Investors.com, The Guardian
Written by Brian Wang, Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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