Every day feels like a big blur for a lot of people since lockdown has come into force in most parts of the world. It comes due to the global pandemic, COVID-19 (coronavirus), which has seen many businesses forced to close and families keeping their distance from loved ones.
It is an uncertain time for everyone including the oil and gas industry. In recent days the US oil and gas prices have fallen below zero, which meant drastic action had to be taken by President Trump. In fact it has even got to the point that oil and gas producers have their hand forced to pay buyers to take barrels off of their hands due to oversupply and little demand.
However, Donald Trump has come to the rescue – offering a financial lifeline to the US oil industry after prices have turned negative for the first time ever.
The UK industry has also seen a huge hit, seeing oil and gas prices fallen by more than 10% to around £13 per barrel.
These global falls in oil and gas prices are a stark reminder of how the economy has slowed around the world within weeks.
Although, oversupply with close to no demand throughout the world is a big factor of why oil and gas prices are so low, there also is further complications of storage issues which means producers are practically giving barrels away.
Storage at a US oil hub has already seen growth of more than 15 million barrels in the last month alone and is soon to be expected to be at full capacity for the first time ever.
This always raises the big question – will petrol prices fall?
The price of petrol is linked to the wholesale price of oil and gas however, it is also driven by competition. This means that motorists will pay whatever the suppliers set their prices at. This does of course mean that petrol prices can fall, if the supplier chooses to do so, but it doesn’t necessarily mean they will.