World Oil Industry Shuts Down, Except Petronas. Tahniah Dan Syabas.

The following has been adapted from Bloomberg (via New Straits Times Singapore).

(Bloomberg) --  great swathes of petroleum industry to start shutting down

coronavirus destroyed demand (for oil)

storage started filling up 

resorted to ocean-going tankers to store crude 

shipping prices stratospheric as industry runs out of tankers 

specter of production shut-downs 

spurred world leaders to join forces to cut production 

scale of crisis dwarfed their efforts

failing to stop prices diving below zero 

shut-downs now reality

It’s worst-case scenario for producers, refiners

• We are moving into end-game
• Early-to-mid May could be peak
• We are weeks, not months, away from it

U.S. shale patch leading output cuts

in U.S. rapid drop in number of oil rigs in operation

last week fell to four-year low

Before coronavirus 650 oil rigs in U.S. 

By last Friday 40% stopped working only 378 left

production needs to slow down

output in Texas, New Mexico, North Dakota will fall much faster than expected 

severity of price pressure catalyst for immediate turndown and shut-ins

ConocoPhillips, Continental announced plans to shut in output

Oklahoma allow oil drillers to shut wells without losing leases

New Mexico made similar decision

North Dakota shale witnessing rapid retrenchment

Oil producers closed 6,000 wells, 405,000 barrels a day 

30% of state’s total

output cuts not limited to U.S. 

Chad, Vietnam, Brazil producers reducing output 

even for Exxon Mobil, BP it’s a challenge

every week 50 million barrels of crude going into storage

enough to fuel Germany, France, Italy, Spain, U.K. combined

At that rate, the world will run out of storage by June

What’s not stored onshore, is stashed in tankers

many tankers at anchor off California 

Before crisis hit, world consumption 100 million barrels a day

Demand now 65 - 70 million barrels

in worst-case scenario, about 1/3 of global output needs to be shut

Refiners Shut

the great shutdown will spread through oil refining too

past week, Marathon stop production in San Francisco

Shell idled several units in three U.S. refineries 

across Europe, Asia, many refineries running at half rate

U.S. processed 12.45m bpd, week to April 17, lowest in 30 years

More refinery shutdowns coming

in U.S. demand is still contracting

global refineries could halt 25% capacity in May

“No one is going to be able to dodge this bullet.”

©2020 Bloomberg L.P.

My comments : Well except maybe Petronas can dodge the bullet. Petronas has said they are not shutting down any of their 18 oil rigs in Malaysia.  Maybe Petronas can beat the whole world. 

Folks, this is not happy news. Bad things are happening and are going to happen in the world economy. Not just in the oil industry.

There is a saying in Tamil 'pretending there is no sand sticking to your moustache after falling down on your face '.  

In other words super hero behaviour.  At a time like this we do not need super hero behaviour. It is more professional to face the real situation and also to be fully transparent.   No need to be hiding things, covering up, not telling the full story etc. 

From reading the Bloomberg article above we can see how the rest of the world is handling this. They discuss all their issues openly and freely. Then the clever people who know the business can come up with solutions or how to minimise the pain etc. 

We are all in it together. 

✍ Credit given to the original owner of this post : ☕ Malaysians Must Know the TRUTH

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