• 3 minutes Will Iron-Air batteries REALLY change things?
  • 7 minutes Natural gas mobility for heavy duty trucks
  • 11 minutes NordStream2
  • 1 hour U.S. Presidential Elections Status - Electoral Votes
  • 11 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Australia sues Neoen for lack of power from its Tesla battery
  • 2 hours Evergrande is going Belly Up.
  • 2 days Europeans and Americans are beginning to see the results of depending on renewables.
  • 23 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 23 hours Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 16 hours Oil Price: does the security vacuum in the Middle East spook investors?
  • 16 hours Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th?
  • 1 day Ozone layer destruction driving global warming
  • 4 days Forecasts for Natural Gas
5 Chinese Energy Stocks To Watch As Its Tech Boom Fizzles

5 Chinese Energy Stocks To Watch As Its Tech Boom Fizzles

Heavy regulation from the government…

How To Buy Discount Gold As Inflation Soars

How To Buy Discount Gold As Inflation Soars

Rising oil prices historically means…

U.S. To Rent Out Federal Storage Space To Oil Industry

U.S. oil producers may soon have access to federal oil storage space to alleviate the glut that is threatening to overwhelm existing private storage capacity.

Bloomberg reports, quoting three unnamed sources, that the Energy Department is considering the option, and an official announcement could come later.

The combination of the demand-crippling coronavirus outbreak and the oil price war between Saudi Arabia and Russia has pressured the U.S. oil industry significantly, leading to growing excess supply that now pipeline operators are warning needs curbing before the tanks fill up.

The storage problem is becoming critical on a global scale. According to the chief analyst of data analytics firm Kayrros, if storage continues to fill up, oil prices could fall close to zero. This zero space available could happen in months, if not weeks.

U.S. West Texas Intermediate has been trading around $20 a barrel, but some regional grades have been faring a lot worse, with Wyoming asphalt sour even turning into negative territory.

“Large-scale production interruptions appear inevitable and imminent,” Pioneer Natural Resources and Parsley Energy executives wrote in a letter to the Texas Railroad Commission. Pioneer also asked the industry body to order a production cut in what would be an unprecedented move to stem the price decline and the excess supply.

The U.S. strategic petroleum reserve (SPR) has a maximum capacity of over 713 million barrels of crude. The U.S. created the SPR in the wake of the Arab oil embargo following the 1973 Arab-Israeli war, as the U.S. sought to avoid a repeat of the fuel shortages that the embargo caused at the time. There U.S. has some 635 million barrels in storage across the SPR facilities.

If the White House opens the SPR to private producers, it would come as a much-needed relief for the troubled industry, although it wouldn’t be enough to arrest the price decline. Production cuts seem increasingly inevitable.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News