In this week’s Off The Cuff podcast, Chris and Art Berman discuss:
- It’s about as bad as it has ever been for the US oil industry
- Expect the government to intervene, as oil is Too Vital To Fail
- Any ‘recovery’ will be long and costly
- Like it or not, energy conservation and efficiency will be forced on society
The global economy remains completely addicted to fossil fuel, particularly oil — the “master” resource.
Of late, a collapse in the price of oil due to a slowing global economy — and then the widespread shutdowns forced by covid-19 — combined with overleveraged players and energetically-expensive extraction practices, and the industry is facing a likely wave of bankruptcies.
So expect extreme action to keep the oil flowing, including but not limited to government takeover. Why? It truly is an “at all costs” need for those in charge. Art explains why extremely eloquently:
Let me stop for a second and clarify what I think is an important insight, and that is the difference between the price of oil and the value of oil.
What does it actually cost to get oil out of the ground? So let’s say it was $60 before COVID-19 and the economic shutdown.
But that wasn’t the price of oil. The price of oil was less. For argument’s sake it was $50 when oil was $60.
by planfortomorrow