As businesses around the globe are navigating through the coronavirus (COVID-19) situation, a number of industries and individuals are being impacted. Many non-essential employees have been laid off or furloughed meaning unemployment rates are on the rise. So what does this mean for oil companies?
As the global economy is down, the majority of industries are being affected, and the oil and gas industry is no exception. With stay-at-home orders being implemented in Texas and the country, people are filling their tanks less frequently because they’re staying put at home.
Fuel Demand is Down
It’s no surprise that the demand for gasoline is down. The general population is being told to stay home and avoid non-essential travel. This has caused a staggering crater in demand for gasoline. In comparison to recent years, the numbers are down by 50%.
Pro Tip: Fuel demand was down, but the industry is looking up.
Prices Dip Below Zero
On Monday, April 20, 2020, the price of oil dipped below zero per barrel for the first time ever in a historical moment. As demand diminished, oil producers had nowhere to store oil and were essentially paying people to take the commodity off their hands. So, what does this mean for the future of the oil market?
The Future of the Oil Industry
The extreme plummet came as a shock to the energy industry. However, after the historical dip, oil prices have jumped back up. While they aren’t at previous prices, they have risen 19%. While this is a small gain, the future of oil production is looking up.
With coronavirus still being a public health threat, the centers for disease control still recommends that people stay home and only leave when necessary. Fortunately, diesel demand is still high as trucking companies are delivering essential goods to consumers. We will get through this unprecedented time together. Copeland International is still available to serve you. Questions about rebuilt Allison transmission services during the coronavirus pandemic? Connect with us to learn more.