Photo: oilandgasmiddleeast.com
As the fight against the coronavirus pandemic intensifies, nearly all the countries on the planet have imposed travel restrictions as part of the social distancing and quarantine measures. This essentially means there are far less vehicles on the road and planes in the sky than before, and that obviously means the demand for fuel is at an all time low.
For economic reasons, oil producers have kept their equipment running, meaning that, despite the fact the demand has dropped, oil keeps coming and, according to specialists, that could mean storage facilities would soon be at capacity. Both these factors, and a host of others, could mean a significant drop in prices for oil.
According to CNN, the price for crude oil in the U.S. dropped to a little over $20 a barrel at the end of March, the lowest level in about 18 years. The source says that in some regional trading, prices have gone as low as single digit figures.
"Demand is falling so fast relative to supply that very soon many producers' main issue is not going to be whether they can ensure operating profit but rather if they can find an outlet for their crude," JBC Energy was quoted as saying by CNN.
So, is a low price for oil a bad thing?
From an economic standpoint, yes. As most of the production facilities across the world have already closed their doors, and there’s no telling when they would open again, the world economy is fast approaching breaking point as it is.
Add to that the fact that oil production is a major industry for a number of countries, including the U.S., and underperforming here as well could be incredibly dangerous.
On the other hand, because vehicles are no longer zigzagging around the world, instruments have detected a reduction in air pollution the likes of which we haven’t experienced in quite a while.
According to CNN, the price for crude oil in the U.S. dropped to a little over $20 a barrel at the end of March, the lowest level in about 18 years. The source says that in some regional trading, prices have gone as low as single digit figures.
"Demand is falling so fast relative to supply that very soon many producers' main issue is not going to be whether they can ensure operating profit but rather if they can find an outlet for their crude," JBC Energy was quoted as saying by CNN.
So, is a low price for oil a bad thing?
From an economic standpoint, yes. As most of the production facilities across the world have already closed their doors, and there’s no telling when they would open again, the world economy is fast approaching breaking point as it is.
Add to that the fact that oil production is a major industry for a number of countries, including the U.S., and underperforming here as well could be incredibly dangerous.
On the other hand, because vehicles are no longer zigzagging around the world, instruments have detected a reduction in air pollution the likes of which we haven’t experienced in quite a while.
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