SAN FRANCISCO, Calif. (KRON) – Oil prices are continuing to collapse and the negative prices for oil are likely to cause hundreds of US energy companies to go bankrupt.
The demand for energy is slipping with planes parked, cars in their garages and factories shut down.
Storage tanks for all that excess crude are getting close to their limits.
Sellers with oil contracts are paying buyers to take the oil off their hands.
KRON4 spoke with a strategic management professor at San Jose State University for some insight.
“The amount of decline of gas prices is not nearly as great as the decline of oil prices and that’s reasonable because the company’s that are selling the refined gasoline are doing less business, they’re probably not, you know, they may be making a little bit more per gallon than they used to but they’re not cleaning up or anything like that. But I would expect, prices are going to stay low for a while, the question is when is the economy going to get be going,” Robert Wood said.
Some oil producers have shut down production.
The Marathon Martinez Refinery has pushed pause on operations because of economic pressures connected to the coronavirus.
The president also said on Tuesday he has instructed the secretaries of energy and the treasury to formulate a rescue plan for the oil and gas industry.
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