For the first time in recorded history, the price of oil in the US has dropped below $0 per barrel. What does this mean for our country?
In a nutshell, it means that some oil producers in the US are going to go bankrupt – and China will benefit.
The Facts
The reason that the May price dropped below $0 is because there is no demand. Not enough people are traveling and not enough planes are flying to increase demand. And because the domestic producers didn’t slow down soon enough there is a lot of oil and not enough storage.
In other words, storage is more valuable than oil in May. What that means for America is that our oil producers are going to be paying buyers to take the oil and that could mean bankruptcy for some producers.
According to The Washington Examiner:
“The paper market contracts are expiring, and the physical market is running out of places to put the crude oil oversupply, while demand remains on lockdown and could deteriorate further as recovery remains elusive,” said Frank Verrastro, senior vice president of the energy and national security program at the Center for Strategic and International Studies. “The combination is crushing oil prices.”
Holders of the paper contracts for West Texas crude must take delivery of the oil and with no storage available the buyers are just not there. The producers then have to pay people or companies with storage space to take the oil with the closing price for the May contracts at more than -$37/barrel.
President Trump announced that he is filling up the strategic petroleum reserves with 75 million barrels of oil. The storage facilities are in Texas and can hold more than 700 million barrels of oil.
What the sub-zero dip means for American consumers is that gas will be cheaper, but we will still not be traveling much in May.
China wins big
The oil crash is a big win for China, which imports almost all of its oil and gas. The Chinese government has been filling the country’s strategic reserves since the oil market started to crash in March.
Even though the headline sounds apocalyptic, as Jim Cramer said, “No, oil is not worth nothing!” In fact, the June oil futures are trading at $21/barrel. As the economies in each of the states start to open, and people start to travel more, the demand for oil will grow as will the price per barrel.
As Stuart Varney said, “we can’t enjoy cheap gas until we start driving again.”
Read the whole story here.
Watch Stuart Varney explain the dangers to our oil industry and the advantage China gains due to low oil prices:
214 Responses
We gave CHINA the playing field all in the greed of money. Relying on rogue countries or nations rather than our own country for needed products just puts us over the proverbial barrel. Giving our countries wealth and items that affect our national security is totally STUPID!!!
To, add more than a few politicians in Washington have also “invested money” in China! When, they as elected politicians should’ve be serving the people of America, and also protecting this nation from foreign governments! More, than a few American politicians like the Bidens, Nancy Pelosi, and Diane Fienstein just to name a few ,has been both investing money into, and also reaping funds with their influence for years now! Thry’re more concerned about China’s interest than their own country! Not to mention American companies who do very much of the same! And, those very practices have been going on now for years! Right behind the backs of the American people! Pure, corruption!
When you can put together a site that does not have co tibial pop up adds, I’ll be back. Till then.
AMF (AUDYOSE MY FREINDS)
Sad, we have played right into their hands. This could not have happened, if our politicians had our backs God says, it the love of money that’s the root of all evil. After this crisis, the American people will need to rise up and fight for our country. Because our leaders are selling our freedoms down the river.
Don’t talk of Doom and Gloom. Especially for Christians who should know about «God’s chastisement », a great Apostasy, nation’s vs. nations, great destructions, great deceptions, and pretty soon, will be wwiii. Then the Second Coming.
Because Humans walked away from GOD, and they have committed such despicable sins vs. HIM.
➡️Why believe in the Communist Chinese Party (CCP)? What if behind them, there’re powerful entities who created all chaos, so they can rule the world?
TRUST in GOD, HE knows what He doing. The enemies will not Prevail.
Our Job is to fast and pray.
LORD have Mercy on us all 🙏
Amen. We need to repent and turn back to God. He is still in control
amen
And President Trump will be Re-Elected in November 2020. 🙏✝️🙏
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