Shitstain's Big Oil Deal Another Wet Firecracker; Touted 10% Production Cut Not Even Close To Enough
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Demand for oil has tumbled in recent weeks as the coronavirus pandemic has crippled global commerce and eliminated untold numbers of commutes, plane trips and cargo shipments. Experts estimate that demand has fallen by somewhere between 25 million barrels and 35 million barrels a day — or up to three and a half times as much as what the oil nations are promising to cut. News of the deal briefly lifted oil prices on Monday, but those gains faded over the course of the day. The U.S. oil price benchmark ended the day at $22.41, or less than half of where it was at the start of the year. Had the group of oil-producing nations, known as OPEC Plus, not reached a deal, oil prices would have collapsed, industry experts said.
Leaders of the American oil industry, which is responsible directly and indirectly for roughly 10 million jobs, welcomed the deal and President Trump’s role in mediating a halt to a Saudi-Russian price war. But even they acknowledged that it would not end their financial difficulties.
“The problem is the demand is still not there,” said Kirk Edwards, chief executive of Latigo Petroleum, a Texas producer. “Even with these cuts there will be a tremendous amount of oversupply on the market, and that’s why you haven’t seen the oil prices dramatically increase.” Mr. Edwards predicted that 40,000 workers would be laid off in the West Texas Permian Basin alone. “There is no reason to drill or complete any more wells this year because there is nowhere to take the production,” he added.
Dozens of small independent oil producers are on the brink of bankruptcy, and the deal between the Organization of the Petroleum Exporting Countries and its allies probably will not save them. A few oil company stocks, which have been sliding for months, rose on Monday, but most, including the largest American oil company, Exxon Mobil, were down.
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https://www.nytimes.com/2020/04/13/business/economy/coronavirus-oil-opec-trump.html?action=click&module=Spotlight&pgtype=Homepage
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