Saudi oil increase will not fully ramp up until next month. The UAE is joining Saudi crude oil output increase. There will be over 1 million barrels/day of additional crude oil put on the world market. This amount can increase. World oil storage capacity will reach its physical limit of 1 billion barrels by year's end without extra capacity being built. WTI is headed for the mid-low $20's if this Saudi/Russia situation is not resolved in the next 1-2 months. The good news is not everybody will lose their jobs. Just a whole bunch of people. Carry on and live in denial until the inevitable happens.
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Chill it's a spike like 9/11 Will be back to normal by Dec lots of opportunities in the current environment...good luck to all hope we all stay employed and safe
It is mostly overblown. Relax and carry on.
If you are wise, you will more than likely carry on. If you are skilled, you will always have a job!
If you are too young to have any memory of the oil industry crash of 1986, then now could be your chance to experience what it was like. I hope it does not get to that level of sudden industry-wide collapse, but it is sure heading in that direction. Pro-active management of oil/gas exploration and service companies are making hard and swift decisions right now. Management with a wait-and-see attitude are going to be in big trouble.
@1wqr You are right on the money. The Big Banks may loan to some but it will be a very select few who have access to sizable liquidity. Most will be in a cash flow bind very quickly. Its a perfect storm; low demand due to Covid-19, existing over abundant supply, SA, Russia and several others adding even more supply, very limited access to loans, stock market falling like a rock equals the O&G industry in shambles. The layoffs and unemployed #s will be massive, to be shortly followed by bottom dollar asset sales, M&A and bankruptcies. 2020 will be one for the record books.
Insert laid off Chevroid muppet gif.
Insert scared muppet gif
If the liquidity markets freeze up then the engine locks up, just like a car engine will do if the engine oil drains out of it. The oil industry’s (and a few others) bonds and debt are now draining ‘engine oil’ out of the engine. The Feds recent $1.5 trillion infusion basically added oil to keep the engine running for a while. Did you notice gold went down when the stocks went down? That is because there was no cash (liquidity) in the markets to buy it. What does this have to do with layoffs? Everything, because if the engine locks up then the problem is much bigger then Chevrons planned transformation effort but will drive deep layoffs across many industries, which will drive markets further down and impact families everywhere. Wish we had stockpiled all those billions spent on buybacks. Hang on, this could be a wild ride.
Yes, Saudi is selling their crude oil at a big discount to the average price in order to undercut both Russian and the United States oil producers. This is no short term geopolitical oil game that is being played. Smaller layoffs are already happening, but the big one is coming soon. SA has already provisionally contracted with 25-30 oil super tankers to take delivery late this month to early next month as it prepares to flood the world with crude oil.
well, an additional 1M+ BPD from KSA, 1M BPD from UAE, and God know what Russia is cooking!
In addition to the $6 to $8 price cut per bbl from KSA, and we are pretty much [royally] screwed!
With corona virus you should be more worried about being alive than getting g pay checks, this is just the beginning of a devastating disease that is unlike anything else, panic mode is already obvious if you go to supermarkets and everything is gone, sad thing is the storm coming in few weeks that would be far more impactful to everyone's life. God bless you all and wish you all the best, hopefully we will make it through, there are reports that survivors have already lost up to 30% of lung capacity, this is going to last long and impact many unfortunately ina very very negative way.