Saudi-Russia Oil Embargo Plea Looms Large | Rigzone
Below is a breakdown of most popular Rigzone articles from the past week with some bearing on the downstream end of the oil and gas value chain.
Citing the destructive effect that Saudi Arabia and Russia’s oil price war has had on the U.S. oil industry, one of North Dakota’s two Republican senators urged President Trump to exercise powers under the Trade Expansion Act of 1962 to embargo crude produced in those countries and elsewhere within the OPEC cartel. U.S. Sen. Kevin Cramer was also one of a dozen senators who had recently urged Saudi Arabia’s crown prince to take steps ease anxiety in the global oil market.
The recent sharp plunge in oil prices has inflicted significant pain on the upstream oil industry, but refiners are also reeling from the dramatic decrease in fuel consumption, according to this article from the Bloomberg. The news agency revealed that analysts foresee more pain in the coming weeks as refiners cut their run rates and the oil market – having flipped to a “contango” situation in which traders stock up on cheap crude – grapples with a tighter physical storage environment.
The U.S. Department of Energy (DOE) plans to stock up on cheap crude oil as well. As overseer of the country’s Strategic Petroleum Reserve (SPR), DOE has outlined plans to buy 77 million barrels of domestically produced crude oil. DOE’s oil purchases, slated to fill the SPR to maximum capacity, will be delivered incrementally by June and will target small and medium producers supplying sweet and sour crudes, Rigzone editor Andreas Exarheas points out in the article.
With its oil sands in Alberta, Canada boasts one of the world’s largest crude oil reserves. However, recovering crude that can be processed from the heavy bitumen and pipeline capacity constraints between Western Canada and refineries on the U.S. Gulf Coast have kept oil sands producers at an oil market disadvantage in recent years. Now, with the Saudi-Russia oil price war raging and coronavirus-induced demand destruction, the situation has become even more precarious for Canada’s oil sector, this article from Bloomberg reports.
Shell is investing billions of dollars in a world-scale petrochemical facility near Pittsburgh to take advantage of abundant feedstocks from the Marcellus and Utica shale plays. Citing to need to protect the project’s workforce and nearby communities amid the COVID-19 pandemic, the company announced that it was temporarily suspending construction at the Beaver County, Pa., site. Shell added that it would take various mitigation measures based on U.S. Centers for Disease Control guidance. The company also anticipates a “‘phased ramp-up’” of work once management determines construction can resume.
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