11:37 PM
Monday 20 April 2020
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Books – Mohamed Ataya:
The American oil industry is facing its worst day, after the sharp fall in the prices of crude futures for the month of May, by recording minus $ 37 a barrel, in a scene described by CNN as a “doomsday” scenario.
The emerging epidemic of the Corona Virus virus caused demand for oil to drop so quickly that prices were falling.
US crude for May turned negative on Monday, something that has never happened since oil futures contracts began trading on the NYMEX in 1983.
US crude for June delivery is still above $ 20 a barrel, but that’s also – according to CNN – a catastrophe.
“Reaching the $ 30 price is very bad, but once you reach $ 20 or even $ 10 it becomes a complete nightmare,” said Artam Abramov, head of shale oil research at Restad Energy.
The American Network pointed out that many American oil companies are indebted to a lot and consequently some of them will not be able to survive as a result of that historic deflation in American oil prices.
In an oil environment of $ 20 a barrel, 533 US oil exploration companies will declare bankruptcy by the end of 2021, according to the expert at Energy Recruitment, who explained that at $ 10, there will be more than 1,100 companies that will declare bankruptcy.
Many oil companies operating in the US market will not survive this economic downturn, said Ryan Fitzmaurice, an energy strategist at the “Rabobank” foundation.
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