Power Line: Oil recovers slightly, but the worst is yet to come - Business Insider

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Power Line: The epic oil glut in photos, leaked documents reveal more industry furloughs, and 3 clean-energy sectors the pandemic is accelerating

"God forbid we have a power outage and the hospitals cannot operate," he said. "God forbid, we had somebody interfere and shutdown entire charging stations." The grid was already going digital. Now there's a pandemic that makes it difficult to do anything in person. It benefits from both the need for resilient infrastructure and low-interest rates.

As I write this, a barrel of Brent is going for about $26. Sure, it's still down more than 60% since the start of the year, but hey! We're in positive double-digits. Refresher: OPEC Plus, an alliance of oil-producing countries led by Saudi Arabia and Russia, reached a historic agreement to cut production by nearly 10 million barrels per day, starting on May 1.

So do other production cuts that companies have been forced to make, simply because cheap oil means extracting it from the ground is no longer profitable. In the US, at least 300,000 barrels per day will be shut-in this month and next, according to the research firm Rystad Energy. Rystad expects the surplus to halve from 26.4 million barrels per day to 13.6 million bpd in May, and fall further to 6.1 million barrels per day in June.

 

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