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ACCORDING to the EIA’s most recent forecasts, global oil consumption will average 92.6 million bpd in 2020, down 8.1 million bpd from 2019. This decline comes from reduced travel and diminished industrial activities due to the COVID-19 pandemic.

While the decline in consumption has been immediate, the production and distribution chains (extraction, separation, transportation, storage, blending and refining) unwind at a much slower pace. Decisions to cap wells are not taken lightly, because shuttering productive sites can result in a complete loss of unrecovered reserves once a well is capped.

Today, almost 100 different countries produce oil, and for many, exports are central to their economies. Within the last two years, the US has become the globe’s top producer, contributing 13-15 million bpd to global markets. Historic production growth in the Permian Basin, combined with ‘unconventional’ growth in other parts of the world has produced more oil than is needed. This past quarter, p...

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