NEWS COMMENTARY

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

Published:
April 21, 2020
Coverage:
Owning the Energy Transition More...
Activities:
Markets More...
by Arij van Berkel
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

LNG bunkering reaches new record in Rotterdam

News Commentary | April 17, 2020

Sleipner, which is recognized as the most powerful semisubmersible crane vessel, reached a new LNG bunkering record after receiving almost 3,300 metric tons in the Port of Rotterdam within the span of 24 hours. As the largest LNG bunkering to date, the milestone is an indication of the growing use ... Not part of subscription

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

The time is now for Saudi Arabia to reevaluate its long-term role in the global energy landscape

News Commentary | June 09, 2020

With global oil demand down and plummeting prices, it is no surprise that the world's largest exporter had a bad Q1. Rather than harping on what is, now is the time to take a serious look at what could be. While oil demand for transportation will decrease, chemicals and plastics are expected to grow... Not part of subscription