With a shattered global economy reeling from the impact of COVID-19, many income sources are temporarily or permanently lost. The result of this is an absence of the means of livelihood for individuals and communities as well as a depressed global economy. Getti Energy is committed to making a significant impact wherever possible. At Getti Energy, as a goodwill measure, we have so far undertaken life-saving projects running into tens of thousands of Dollars in direct benefits to rural and disadvantaged communities. Additionally, we are supporting frontline healthcare workers by partnering with personal protective equipment manufacturers (PPE) to enhance the much-needed safety barriers for healthcare and other essential workers.
Getti Energy is committed to making the maximum positive impact on humanity. We continue to identify individuals and communities in dire need and then provide much needed intervention within our global corporate social responsibility framework. With these and other complementary roles, we are optimistic that the human community will come out stronger after the chips of COVID-19 are all down.
GETTI ENERGY’S VIEW OF THE NEAR FUTURE OIL MARKET
The COVID-19 disease phenomenon is unprecedented in our recent history. Decreased and/or halted economic activities are direct impacts of mitigation effect to limit the spread of the disease. With more than 1 billion people in lockdown, global petroleum consumption has decreased by more than 31% between March and April 2020. A supply gut resulting from the initial price war between Saudi Arabia and Russia further contributed to the crude oil market disequilibrium. The short-term effect of an excessive supply and a lackluster demand created a bearish oil market. For the first time, since the trading of West Texas Intermediary (WTI) oil began in 1983, the benchmark hit a negative threshold of $-40.32/barrel on April 20, 2020 at 14:30 on the NYMEX commodity exchange.
Under normal conditions, taking delivery of crude oil purchased is quite straightforward. The said normal physical settlement process was, however, impeded by the decline in the availability of committed crude oil storage capacity: no demand and excess supply resulted in no committed storage. As of the middle of April, the U.S. refineries production alone fell to 12.8 million barrels per day (b/d) which is about 4.1 million b/d (24%) less than the same time in 2019, and China’s domestic petroleum and other liquid fuel consumption (for instance) have decreased by 600,000 barrels/day in reference to the same time frame.
GLOBAL OIL PRODUCTION AND CONSUMPTION:
PETROLEUM STORAGE CAPACITY IN CUSHING, OKLAHOMA:
The Covid-19 disease wiped out an equivalent of a decade worth of crude oil consumption between March and April 2020. However, as the world begins to slowly return to some form of measured normalcy, economic activities are anticipated to start rising. Grounded planes will start to fly, heavy trucks and machineries will start rolling again, and our automobiles would increasingly start plying our roads again. The world global demand for oil will increase with economic activities, nudging the Oil and Gas industry to some sustained long-term stability even though major oil companies have shed capital expenditures by more than 30% in response to collapsed oil prices. An OPEC + alliance will shutter more than 9 million barrels of crude oil from global supply daily, beginning May 2020. As demand rises, and supply is curbed, the price per barrel of benchmarked oil is expected to rise. The EIA projects a $45.62/barrel price for Brent in 2021, and $41.12 for WTI.
The world needs Oil to run. And with Petroleum and Natural Gas contributing about 91% of the global energy consumption, demand for Oil and Natural Gas is expected to be on the increase, and as countries and companies rely on the price of oil to shore up their failing budgets, oil pricing will continue to be strategically calibrated. Thanks to the United States that is now exporting more than 2.5 million barrels of oil daily, a chunk of which comes from Canada through a sophisticated and increasingly integrated network of pipelines. Getti Energy Inc will remain a player in the Canadian upstream Petroleum and Natural Gas market as well as the global energy industry.
CRUDE OIL WTI PRICE FORECAST:
United States Crude Oil Exports increased by 45% in 2019:
United States Crude Oil export destinations:
