Already Cheap Crudes May Be Worth Less Than Zero Dollars

What follows are some of the most viewed articles on Rigzone from the past week that correspond somehow to the downstream side of the oil and gas industry.

Some American Oil Selling at Under $10 a Barrel

U.S. refiners are scaling back fuel production amid the coronavirus-induced plunge in demand for gasoline and jet fuel, and the crude oil storage options are growing tighter, this Bloomberg article observes. The news service pointed out that the oversupply situation has caused some crude prices to approach or even break record lows. Moreover, the writer notes that transportation costs have effectively made some production worthless – and even below zero dollars per barrel in certain cases.

Shell Pulls Out of Louisiana LNG Project

Shell, like other oil and gas companies, has dramatically curtailed its list of capital projects to adapt to the market downturn. One project that Shell has dropped from its investment plans is a 50/50 joint venture with Energy Transfer to convert the latter firm’s liquefied natural gas (LNG) import terminal in Lake Charles, La., into an export facility. Given Shell’s departure from the project, Energy Transfer stated that it is exploring options such as taking on equity partners and scaling back liquefaction capacity.

Trump to Meet with Oil Executives

Citing unnamed sources, Bloomberg reported Wednesday that a group of executives from oil and gas companies – including midstream and downstream firms – were planning to meet with President Trump Friday to discuss how the administration could assist the struggling industry. Purported options include imposing tariffs on oil imports from Saudi Arabia and providing relief from Jones Act maritime rules requiring U.S.-flagged and crewed ships to carry goods between U.S. ports.

Sinking Fuel Demand Shuts North American Refinery

Pain from the oil and gas downturn is not limited to the United States, as this Bloomberg article points out. The news agency cited a report that an Atlantic Canada refinery has idled and could remain so for up to five months. In addition, it noted that other refiners from North America to Europe to Asia are easing back utilization to cope with much softer fuel demand.

To contact the author, email mveazey@rigzone.com.