The Next Chapter of the Oil Crisis: The Industry Shuts Down

The Next Chapter of the Oil Crisis: The Industry Shuts Down

The next chapter in the oil crisis is now inevitable: great swathes of the petroleum industry are about to start shutting down.. Before the coronavirus crisis hit, oil companies ran about 650 rigs in the U.S.. Gulf of Mexico, believes that output in Texas, New Mexico, North Dakota and other states will now fall much faster than expected as companies react to negative prices, which have persisted for several days last week in the physical market.. The price shock has been particularly intense in the physical market: producers of crude streams such as South Texas Sour and Eastern Kansas Common had to pay more than $50 a barrel to offload their output last week.. The output cuts won't be limited to the U.S.. In emergency board meetings last week, oil companies small and large discussed an outlook that's the most somber any oil executive has ever witnessed.. Big Oil will offer an insight into the crisis when companies report earnings this week.. Saudi Arabia, Russia and the rest of the OPEC+ alliance will join the output cuts on Friday, slashing their output by more than 20%, or 9.7 million barrels a day.. Over the past week, Marathon Petroleum