US Oil Prices Drop to Negative as Demand Shrinks
Because storage capacity could be full in May, oil producers are paying buyers as much as $37.41 to take barrels of oil off their hands; they've been as desperate as to rent tankers to store oil. This is due to a drop in demand from the global oil market, worldwide shelter in place/lockdown means little oil is burned in cars, planes, trucks, trains, and ships. Additionally, storing oil has become more expensive than selling it, as the world is running out of storage locations. If oil prices continue to be this low, nearly 500 companies will have to file for bankruptcy in the coming months. Oil prices have never been negative before, but have been dangerously low in the past. In 2008, the recession diminished energy demand, decreasing oil prices, and this was a short term situation. Leading exporters have agreed to slash production in order to cope with the situation, but even though the market is in shambles right now, a resurgence in demand once businesses are opened and life returns to normal will bring the industry back to where it was before the virus.
1. How has coronavirus affected oil prices?
2. How will this dip in oil prices motivate governments to move quicker toward renewable energy?
3. How will turmoil in the oil industry affect governments' decision to give bailouts to failing companies?
Coronavirus has lowered the oil prices as not many people are going out using transportation that requires oil as a fuel. The government might look more into renewable energy or starting plans for research because oil is a huge industry in the US and without it is a blow to the economy. The oil industry is large and the government might change how much money is given or criteria needed to get a bailout.
ReplyDeleteGovernments cannot use oil to strengthen their economy, so they will try to find another way to earn some more money. The answer would be to turn to renewable energy. Because there is no other way to earn money, this is the only solution. However, many people are being quarantined right now, and renewable energy could turn out to be just a little easier to profit from than oil.
ReplyDeleteThe coronavirus has made oil prices decrease. This dip in oil prices will most likely make it slower for governments to go toward renewable energy. The decrease in price will encourage governments to buy a lot of cheap oil right now and store it for the future. The turmoil in the oil industry will encourage governments to help companies that are not doing so well and need some extra money to keep running.
ReplyDeleteCovid-19 has made a huge impact on oil prices to the point where they have reached -$40 per barrel. I do not think that the dip in oil prices will motivate governments to switch to renewable energy because it isn't just oil that is taking a hit but all energy. If anything, governments will spend lots of money bailing out oil companies so that they can use oil in the future. However, because the pandemic does not seem to be ending any time soon, it will take a lot of money to bail out the oil companies. In addition, countries that rely on oil as their main source of income will see huge economic recessions. For example, Saudi Arabia and Venezuela. According to this article: https://www.weforum.org/agenda/2020/04/united-states-eneregy-electricity-power-coronavirus-covid19/ the US has seen a 16 year low for energy consumption. All energy sources are bound to be hit very hard and governments will have to spend a lot of money to bail out these companies.
ReplyDeleteIt is amusing that a world pandemic could be what pushes many governments and peoples to renewable energy. Oil is not as useful these days, as people are driving around less and shops are not open. This is good as there is less oil being used and harming the enviroment. It is also bad because it will have a massive economic impact on the countries that rely on oil for income. It will be interesting to see what happens when this is all over.
ReplyDeleteThe oil prices have down down as the demand has also gone down. This will result in certain companies being hard pressed to make money. The problem with this is that many oil companies already have a large sum of money, and are able to adapt to this, either by producing more and selling via partnership, or by firing workers and saving money for when oil prices rise.
ReplyDeleteTheir is less demand for oil, causing it to go down. I would say less people are driving their cars around because of the stay at home order and so less and less people are needing to fill up on their gas. I'm not sure if ther government will be more inclined to use renewable energy because of the oil price drop. Right now they are trying to stop the spread of the Corona Virus and once that happens, I think they'll go right back to oil.
ReplyDeleteDue to the shelter in place and lockdown situations in many countries, people are rarely leaving their houses or using their vehicles so they don't need gas. Also, flights and other methods public transportation are being cancelled or lessened. Lessened demand for oil makes the price go down. While it shouldn't take a world wide pandemic to motivate the government to find and use renewable energy sources, I do hope that we can change.
ReplyDeleteDue to the coronavirus, oil prices have greatly decreased in correlation to less oil being used during this time. While I would hope that it is the other way around, I don't really think that this temporary loss of use for oil will promote research and efforts being put into developing renewable energy sources, as this is most likely not anywhere high on the priority list currently. Many companies can apply for grants and funds to help them remain in business, so the same goes for oil companies who will most likely be receiving assistance from the government as to sustain them.
ReplyDeleteBecause of the coronavirus, many countries throughout the globe rely less on gas, due to the fact that there is little car activity during these times. This pandemic may encourage others to invest in renewable energies in the future, to prepare just in case something like this happens again within the foreseeable future. As of right now, the most profitable method would be to switch to a renewable energy source, and it would depend on the person to either maintain using the renewable or to switch back to oil after the pandemic is over.
ReplyDeleteBecause of the shelter in place, many have gone out less due to places being closed. This has allowed many people to save money on gas because they don't need it as much. This has a negative effect on the industry, however it is much better for our environment.The government can use this as a time to focus on renewable energy. However, the government will have to deal with the bankruptcy of tons of companies. This will prove to take a long time and renewable energy may not be at the forefront of what the government has to do.
ReplyDeleteCovid-19 has affected oil prices dramatically. The main reason being that the Shelter in Place has people staying indoors more and not using vehicles like cars and other motor vehicles that would require oil to run. As a result, there are more supply than demand for this oil which oil companies are struggling to manage.
ReplyDeleteDecreased demand for oil due to the coronavirus pandemic has led to a steep drop in prices, because oil companies have too much supply and not enough demand. While I still don't really understand what negative prices mean, I agree that the deteriorating situation means oil companies will be hit hard and forced to buy more storage space, etc.
ReplyDeleteNegative prices mean that oil companies are paying people to take barrels of oil off their hands - right now they're paying around $30 a barrel. The deteriorating storage situation should force oil companies to expand into renewable areas in the future but as of right now they have to rent tankers in order to keep finding space for barrels.
DeleteWhile this intense decrease in oil prices is good news for the environment and renewable energy alternatives, it's also very concerning for our economy and unemployment rates. A lot of Americans work for and rely on oil companies for work, and without them, there could be a huge increase in unemployment and poverty. However, this would hopefully lead to growth and increased employment from renewable energy companies, but I doubt the transition will be easy.
ReplyDeleteI think that politics always has been and probably always will be about money to some extent. It is clear that COVID-19 has wrecked the economy not just in the United States, but across the globe. The shut down that we're in could cause irreversible damage and change how things work in our society forever. I think that this change is motivating for governments and officials to do something about the virus, but I also find it disheartening that the deaths of thousands of innocent people weren't enough for the government to "wake up" and take action. I think with everything that's going on right now, switching to renewable energy just isn't a top priority.
ReplyDeleteI think it's really interesting to see the effect COVID-19 is having on aspects of society outside of its obvious effects on the medical aspect. This effect on the oil industry is pretty unfortunate because if it causes companies to go into bankruptcy, unemployment rates might increase dramatically, and in a situation where everyone is self quarantining, it is next to impossible to find a new job.
ReplyDeleteIt's quite obvious that the virus has caused a noticeable decrease in oil prices. If several oil companies are forced to declare bankruptcy then the government will most likely feel more pressured and obliged to bailout the companies. Overall the decrease in prices will have a negative impact on the oil industry until the quarantine is lifted and the demand for oil goes back to normal.
ReplyDeleteThe virus caused less people to travel in their cars because of the shelter in place that is going on right now. This would cause people to spend less money on gas which would negatively impact its sales. The government will most likely bail out oil companies as demand will go up again after the pandemic is over and people start to travel once more. Economy is also a big concern, especially for areas that rely on oil as their main source of income.
ReplyDeleteGovernments won't move quicker toward renewable energy. Because of the coronavirus' impact on global markets and investor confidence, investors are not interested in renewable energy, meaning that prices can't lower, making the technology unaffordable. Already, Russian oil giant Gazprom is continuing it's operations in the Arctic, showing that governments will not stop when it comes to oil.
ReplyDeleteThe Corona virus has definitely has an increasing impact on the prices of oil. Because the demand for fossil fuel oil has decreased many oil companies' chance of going bankrupt has increased significantly as well.I think this dip in oil prices might not be the total motivation that will push the governments to use renewable energies more, however I think that because less people are using oil, there is now more room for the renewable resources.
ReplyDeleteCassie Vass 5th period
DeleteCoronavirus has evidently caused oil prices to drastically drop, as there is much less of a demand due to the shelter-in-place protocol. This decrease should serve as a beacon of hope for environmentalists, and prove to governments that it is definitely possible to convert to renewable energy sources, especially since the oil companies are suffering so greatly now. Basically, it seems that switching to renewable sources would be less expensive than helping the financially unstable oil market.
ReplyDeleteThe coronavirus has caused an immense drop in oil prices. This dip in oil prices wouldn't exactly move governments to move quickly towards renewable energy, as most governments are concentrated on preventing the spread & treating COVID-19. However, this demonstrates to the governments the effect of reducing the use of cars, planes, trucks, and ships.
ReplyDeleteThe corona virus has affected the global economy in numerous ways, one of which being oil. There has been a worldwide shut down, halting production in many factories which may use oil. Because of this halt in production, demand for oil has decreased. Also, schools and jobs have been cancelled, forcing people to stay at home. With much less cars and other automobiles on the road, once again demand for oil is significantly lower.
ReplyDeleteCoronavirus has lowered these oil prices because not many people are simply willing to go outside as often. Even if that means taking a few less trips out in their daily commutes, oil companies are losing their business to thousands of people because of this pandemic. Switching to renewables honestly wouldn't help in this case as demand for them might also be somewhat low. No one is fixated on improving the environment as of now, the only concern is that the pandemic issue is resolved.
ReplyDeleteCoronavirus has caused oil prices to decrease but also causing a dip in the economy of these oil companies. They are hitting lows in the market and are struggling to stay afloat. I feel like governments won't be as motivated to move to renewable energy if oil prices have decreased. This is because they have to pay less money for the oil than they will have to for switching to a new form of energy and it's not worth it right now, especially since many are losing money in teh stock market and the economy of America is just barely struggling to keep afloat.
ReplyDeletethe Coronavirus has lowered the oil prices due to people not going
ReplyDeleteout and not using transportation that requires oil as a fuel. This has
a negative effect on oil industries,but it is much better for our environment.
The recent drop in oil prices demonstrates how oil is not sustainable in the climate or in the economy. I think governments will look into other more reliable sources of energy that can be used even in times like these. Because very little money is being put into oil right now there is a chance for that money to be put into finding other cleaner sources of energy that could help the environment and the economy.
ReplyDeleteThe recent drop in oil prices is due to less movement in evry part of out country less infrastructure needing oil to function are working so there is less of a demand for oil. Government need to prepare for this better to use renewable and cheaper energy sources
ReplyDeleteTurning to renewable energy may be the governments only option. Depending on how fast or slow the virus spreads, the governments will want to go back to oil as soon as the virus has been contained. It sucks that this has made such a negative impact on the oil industry and that they are running out of options.
ReplyDeleteAlthough the government is currently dealing with a dire situation, I don't believe that they will begin to shift to renewable resources. Clearly, the government has too much invested in the oil industry for it to fail. While the volatility of the current market prevents companies from making money, the prices will eventually rise as demand returns. It is my belief that the government will buyout any major oil companies that fail because they can be such a strong asset and they'll be able to cover any potential losses. Despite this, if the economy takes another dip as is being predicted, the oil industry may become futile. Currently, the national economy isn't in a good position to pivot into renewable energy because of historical lack of investment. Consequently, the government will probably begin to invest in green energy; however, they get more out of saving a major oil provider.
ReplyDeleteThe coronavirus has made the oil prices drop as they are of less value. The government now sees that renewable energy is a lot less costly and would be a large upgrade. The government would have to give them money as they would probably have to file for bankruptcy or change industries.
ReplyDelete