Downtown Calgary, Alberta, Canada PHOTO BY theWedge.LIVE
By theWedge.LIVE
We were the fly-on-the-wall today, listening to an authentic talk between three oil executives. You can hear it too.
Today, oil hit $6 per barrel. That’s 30 minutes ago from this writer’s first words.
Oil may come back to $20 in the foreseeable future. But no oil producer can survive at this price.
Let’s be honest, every producer wants $80 per barrel. Soon Russia and the Saudis will capitulate to their own desires.
But there is a new insurgent.
Covid19 has caused a vertical drop in demand. So further curtailments will help raise the price a little; but, not close to break-even.
Alberta Premier Jason Kenney has to do this. It is existential. Federal Minister of Finance, Bill Morneau, offered aid to clean up orphan wells–that’s it. No investment in this vital industry’s future–nada.
Producers that can hang-on until the virus is vanquished, estimated to be July or August 2020, will survive. Juniors and mid-size will likely be absorbed or vanish. And if, that’s a serious if, the virus does not resurface.
150 million in North America unemployed? It is unimaginable.
The following podcast by BOE Report Publisher, Josh Groberman, is a good listen, authentic and honest:
BOE Report Podcast Episode 13: Oversupplied oil market and COVID-19 cause mayhem
The Wedge 