Too Much Oil: How a Barrel Came to Be Worth Less Than Nothing

Stanley Reed and  New York Times, April 20, 2020

Something bizarre happened in the oil markets on Monday: Prices fell so much that some traders paid buyers to take oil off their hands.

The price of the main U.S. oil benchmark fell more than $50 a barrel to end the day about $30 below zero, the first time oil prices have ever turned negative. Such an eye-popping slide is the result of a quirk in the oil market, but it underscores the industry’s disarray as the coronavirus pandemic decimates the world economy.

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Estimates suggest that to be economically viable, fracking oil and gas requires oil prices to be aboive $30 – $50.  At an oil price of $120, fracking is very profitable.  WIth dropping pol prices, consumers celebrate but frackers scramble. Can Fracking Survive at $50 a Barrel?

 

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