"A price war led by Saudi Arabia and Russia is crushing the price per barrel just as the coronavirus is hurting demand."
"The dramatic fall of oil prices could upend the American fracking industry, analysts said Monday, as panic over the coronavirus outbreak lessened global demand and Saudi Arabia and Russia flooded the market with new supply.
Oil prices plunged by as much as 30% on Sunday, which is the steepest tailspin since the United States began bombing Iraq in the 1991 Gulf War. The Organization of the Petroleum Exporting Countries, the 14-nation cartel that, along with Russia, manages much of the world’s oil supply, failed to reach a deal to cut oil production, triggering a price war that risks bankrupting debt-loaded U.S. frackers.
Now the fracking industry, which President Donald Trump sought to expand with hard-line support for increased fossil fuel production, faces potential ruin. The spread of the coronavirus, which causes the disease known as COVID-19, is grounding flights and halting factory production in China, while rival producers oversupply the market to defend their share. Fracking, a ballyhooed but financially fragile sector, struggled to stay afloat with crude selling at $50 per barrel. If prices stay around $30, or even fall as low as $20, U.S. frackers simply might be unable to keep up.
“It’s a financial bloodbath,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis. “With oil prices at the current level, there’s a real risk many of them will simply go bankrupt.”"
Alexander C. Kaufman reports for HuffPost March 9, 2020.
SEE ALSO:
"Coronavirus Spurs 'Domino Effect' Of Wind, Solar Delays" (EnergyWire)
"Latest Arctic Lease Sale Harbinger of Bad Returns for Taxpayers" (Morning Consult)
"Alaska’s Last Oil Frontier Will Never Be Developed" (OilPrice)
"Why This Oil Crash Is Different" (Foreign Policy)
"Republicans Lukewarm On Oil Industry Rescue" (E&E Daily)
"EVs, Shale And Trump: 5 Takeaways From The Oil Crash" (EnergyWire)
"Oil Glut On Coronavirus May Sink Trump's 2020 Message Of 'Energy Dominance'" (Washington Post)
"Oil Price War Threatens Widespread Collateral Damage" (Washington Post)
