With storage at capacity, those companies that could store oil aren’t buying it anymore as they do not use it and have no space to store it. WTI oil is down more than 100% this year Brent oil has fallen about 65%. As global demand for crude oil has plummeted, the United States has seen its oil storage capacity go out of the window because airlines and other buyers aren’t using nearly as much crude as they were before the crisis. Demand for oil is will probably remain volatile for months because few experts believe the economy will quickly rebound to where it was before the pandemic. This meltdown has never happened before, even if we did have collapses in the past, and experts did not expect prices to stay negative for much. Similar is the example of many other European and Asian states, where taxes can bring the final prices even higher. In addition, state imposed and local taxes account for up to 20% of what customers pay at the gas stations in the United States. ![]() It requires employment of thousands of people throughout the supply chain sequence. Apparently, it is very costly for big corporations, like ExxonMobil and Royal Dutch Shell, to refine oil and transport it to gas stations. To be more specific, crude oil is only the raw material from which gasoline is made after being refined to diesel, jet fuel and other products. Without a use for it, the world’s biggest players (producers) are running out of places to store all the oil that companies continued to pump out of the ground but consumers did not ask for. Demand for oil has plummeted in these recent weeks while the coronavirus pandemic has been shutting down multiple pillars of the economy, eliminating much of the need for fuel to transfers good or transport people. It was not a surprise that oil demand would lower due to the shutdown of many sectors of the global economy but this is not the whole story and the absurd started manifesting really recently. ![]() Apparently, the real-life business was, is and will remain ruthless for the foreseeable future, and sometimes the global players bring the game past the thresholds of ‘sanity’. ![]() It is about the early years of the 20th century, when Daniel Plainview, an oil prospector, entangles himself in a story of family, religion, hatred, oil and madness, focusing on the ruthless nature of the early days of the oil business. Our first thoughts after seeing the unfolding oil prices crisis was the title of the 2007 Hollywood movie: “There will be blood”.
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