The Oil and Gas Industry Is in Its Worst Crisis Since the Great Depression

The Oil and Gas Industry Is in Its Worst Crisis Since the Great Depression

April 22, 2020

CNBC reports:

The action Monday in the most closely watched energy market in the world was devastating, as the value of the May oil futures contract plummeted 300 percent, flipping into negative territory to end at minus $37.63 per barrel. The price action was unprecedented, and hard to explain but it was also a wake up call for an industry that is likely to see much more pain ahead.

The major plunge in the market comes as a warning to the industry that it needs to dramatically curb drilling and overcoming the supply glut could be more challenging than expected.

“The world has never come to a halt like it has in the past few weeks,” said Francisco Blanch, global head of commodities at Bank of America. “60% of oil demand comes from transportation. Gasoline sales are down more than 50%. Flights around the world are down 80 or 90%. The collapse in consumption is mobility driven. That’s what makes this crisis different than the Great Depression.”

Today, President Trump called on the government to make funds available to the U.S. oil and gas industry to help it survive this historic collapse in global crude oil prices.

We support President Trump’s call to action to help the struggling industry that supports millions of American jobs. America’s hard-won energy independence is in jeopardy and it is our duty to defend the industry vital to our national security and economic growth.