Various reports hit the news feeds today quoting a deliberately headline-grabbing statement by Paul Sankey, managing director at Mizuho Securities, in which he is reported as saying, “Oil prices can go negative.” That is, they could as a combination of Saudi Arabia (and Russia) flooding the market with increased oil and the market running headlong into COVID-19-induced curtailment of activity that is suppressing consumption, which combined will create the perfect storm of excess supply.
In reality, inventory levels are already rising.
CNN quotes Sankey, who said global oil demand is only around 100 million barrels per day.
However, the economic fallout from the coronavirus pandemic could crash demand by up to 20 percent.
This would create a 20 million barrel-per-day surplus of oil in the market that would rapidly exceed storage capacity, forcing oil producers to pay customers to buy the commodity – hence, in effect, negative oil prices.
The American government plans to purchase a total of 77 million barrels of oil starting within weeks the article states, but according to Sankey, this can only be done at a rate of 2 million barrels per day, leaving a massive excess that will be looking for a home.
Oil prices plunged 30% in early trading after OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production, leading to fears of an all-out price war.
International benchmark Brent crude futures plummeted 30% to $31.02 per barrel, its lowest level since Feb. 2016. U.S. West Texas Intermediate crude dropped 27% to $30 per barrel, also its lowest level since Feb. 2016. WTI is on pace for its worst day since January 1991 during the Gulf War, and its second worst day on record.
“This has turned into a scorched Earth approach by Saudi Arabia, in particular, to deal with the problem of chronic overproduction,” Again Capital’s John Kilduff said. “The Saudis are the lowest cost producer by far. There is a reckoning ahead for all other producers, especially those companies operating in the U.S shale patc
State Rep. Josh Kail (R-Beaver) owns stake in his brother’s fracking-related company, among other ties to the industry. State Sen. Elder Vogel (R-New Sewickley) invests in two energy companies with ties to Pittsburgh regional fracking. And state Sen. Camera Bartolotta (R-Monongahela) has leased the mineral rights of her property to natural-gas companies.
London (CNN Business)The United Kingdom made history last year when it became the first major economy to commit to pumping no more greenhouse gases into the atmosphere than it removes by 2050.Dozens of countries have since followed its lead to achieve “net zero” emissions, and with three decades to go before the deadline, Britain’s progress provides a promising blueprint.Its carbon emissions were 44% below 1990 levels in 2018, with renewable energy now accounting for 33% of its energy mix and coal contributing just over 5%. That is thanks in large part to its success with offshore wind and focus on nuclear energy.
Gasoline prices fell in most states over the past week as a large increase in gasoline inventories may have offset a surprise oil production cut announced by OPEC, said Patrick DeHaan, head of petroleum analysis for price-tracking service GasBuddy.
Gas prices in the Pittsburgh area fell 2.4 cents per gallon in the past week, averaging $2.82, according to GasBuddy’s survey of 731 stations. That’s 1.6 cents per gallon more than a month ago, and 13.1 cents per gallon more than a year ago.
Pennsylvania’s natural gas production growth led the United States in 2018 — and helped set a national record.
Two weeks ago, following statements against future development of cracker plants made by Pittsburgh Mayor Bill Peduto, Allegheny County Executive Rich Fitzgerald went on KDKA radio and gave an interview full of boosterism for natural-gas drilling, aka fracking, and of potential future cracker plants.
Petrochemical plants, aka cracker plants, refine natural gas into plastic pellets. The region’s first cracker plant is currently being constructed in Beaver County by oil giant Shell, which will likely be fueled by natural gas fracked in the Southwestern Pennsylvania region
Gasoline prices are down in Pittsburgh and across the nation, according to price tracking service GasBuddy.
In the Pittsburgh region, gas prices are down 4.1 cents per gallon in the past week, to an average of $2.83 per gallon, according to GasBuddy’s survey of 731 stations. That’s 5 cents per gallon more than a month ago, but 30.3 cents per gallon less than a year ago.
The national average price has come down 2.4 cents per gallon in the past week, averaging $2.63. That’s up 6.5 cents per gallon from a month ago, but 25.1 cents per gallon lower than a year ago
CNN)A natural gas leak has forced the evacuation of homes Friday morning in Lawrence, Massachusetts, one of the communities hit last year by a string of gas explosions that killed at least one person.Power has been cut to 1,900 homes in the city, about 30 miles north of Boston, due to the gas leak, National Grid spokesman John Lamontagne told CNN. About 80,000 people live in Lawrence.Gas service also has been cut to homes.
According to GasBuddy.com, gas prices in Connellsville on Wednesday averaged $2.69 per gallon, $2.74 in Rostraver and ranged from $2.66 to $2.89 in Uniontown, and $2.79 to $2.99 in Monongahela.
The Pennsylvania Turnpike Commission expects 3.6 million motorists to travel the turnpike for Labor Day weekend as reports have summer travel on the system up 1.5% over last summer.
Tehran claims Iraqi tanker was smuggling fuel; Lucas Tomlinson reports from the Pentagon. #FoxNews
Iran seized a vessel it accused of smuggling fuel in the Persian Gulf, the third time the Iranian Revolutionary Guards detained a ship in the waterway in recent weeks as the stalemate between the Islamic Republic and the US continues.
The Iranian forces intercepted the ship Wednesday near Farsi Island, which is used by the Revolutionary Guards as a navy base, state media reported on Sunday.
“The IRGC’s naval forces have seized a foreign oil tanker in the Persian Gulf that was smuggling fuel for some Arab countries,” the paramilitary’s forces commander Ramezan Zirahi said, according to state-run media.
Exxon Mobil Baytown Area said a unit processing propane and propylene burst into flames late Wednesday morning at the Olefins plant, forcing the city to issue a shelter-in-place order, according to Fox 26. Black smoke from the fire could be seen for miles. The explosion happened shortly after 11 a.m. and was contained by the afternoon.
There are some who believe that these dirty monoliths of the oil age can be rehabilitated – they want to transform them into sources of clean, renewable energy. Engineers believe it is possible to use the vast hull of oil tankers to create floating power stations that can convert the ocean swell into electricity. This is the ambitious plan to create the world’s first “waveships”.
“The current problem with most wave energy projects is that they are fixed in place, close to the shore so they can be connected to the electricity grid,” says Andrew Deaner, managing director of ShipEco Marine, the company behind the waveship project. “This isn’t necessarily where the best waves are. With a ship you are mobile, so you can move to the edge of low-pressure weather systems where the waves are bigger and there is more energy.”
A massive fireball lit up the night sky in South Philadelphia early Friday in what was apparently an explosion at a local refinery. Early reports gave the location as 31st Street and Passyunk Avenue, not far from the city’s sports complex.
Officials in Philadelphia confirmed that the early morning fire started at the 150-year-old Philadelphia Energy Solutions Refining Complex.
Shortly after 5 a.m. Friday, Philadelphia’s FOX 29 reported that the fire had been contained with no reports of injuries or evacuations.
Reports of the fire began spreading on social media shortly after 4 a.m. Friday.
The controversial oil pipeline expansion project stalled after a court quashed previous approval.
New York (CNN Business)Oil prices climbed on Tuesday after Saudi Arabia reported “armed drones” attacked two pumping stations in the kingdom, underscoring rising tensions in the Middle East.US oil prices rose 1.4% even though Saudi Aramco told CNN that the attack caused “no damage to oil production, no oil spills or injuries.” Brent crude, the global benchmark, jumped 1.6%.The Saudi Energy Ministry told the kingdom’s state-run press agency that the attack caused a fire that has since been contained.The apparent drone attack comes just a day after Saudi Arabia said two of its oil tankers were sabotaged off the coast of the United Arab Emirates.
Two Saudi oil tankers were the targets of a “sabotage attack” off the coast of the United Arab Emirates on Sunday, Saudi Arabia’s energy minister says.
The incident near Fujairah port, in the Gulf just outside the Strait of Hormuz, caused “significant damage” to the ships, according to Khalid al-Falih.
The UAE said four ships were targeted, but that there were no casualties.
Iran, which borders the strait, called the incident “worrisome and dreadful” and called for a full investigation.
It is not known who carried out the alleged attack, which comes amid heightened tension in the area.