Negative oil prices show that it is in the interest of the oil industry to diversify feedstock

April 21, 2020
Owning the Energy Transition More...
Markets More...
Truly disruptive

The negative price for May WTI futures (-$40 per barrel) was probably an anomaly, but it also was a symptom of bigger underlying issues that the industry must address. Even though the oil industry theoretically has a diversified product portfolio, the current situation shows that its ability to switch between markets is extremely limited. The industry failed the stress test. It lacks the storage capacity and flexibility in its product mix and production capacity to gracefully handle a demand decrease. It is hard to change those parameters. The industry should focus on diversifying the feedstock for downstream. That way, it can more easily absorb supercheap oil and be more robust against price hikes in the other direction as well.

For the original news article, click here .

Further Reading

COVID-19 will finally close the door on U.S. coal despite Trump's America First Energy Plan

News Commentary | May 15, 2020

According to the EIA, renewable energy will surpass coal in the U.S. electricity mix this year for the first time in history. Coal has been on the decline for nearly two decades and was replaced by natural gas as the primary source of electricity in 2016, but a 16‑year low in electricity demand ... To read more, click here.

COVID-19 will slow 5G rollout due to operator deployment issues and buyer economic woes

Analyst Insight | June 18, 2020

In our recent webinar, Lux published its framework on "Preparing for the aftershocks of COVID‑19." In this insight, we analyze COVID‑19's impact on 5G using the same framework. The framework identifies the five major trends that will define our post‑COVID future. These trends don't address directly ... Not part of subscription

Snam tests 30% blend of hydrogen and natural gas for steelmaking

News Commentary | May 24, 2021

Hydrogen is one the most promising options for decarbonizing the carbon‑intensive steel sector, and a 30% blend is an important step toward an eventual 100%‑hydrogen steelmaking route. Swapping natural gas with hydrogen will likely lead to higher costs of production (up to a 30% increase according ... Not part of subscription