With dramatic demand drops amid worldwide COVID-19 quarantines, everyone’s talking about storage. Paul Wiseman takes a close look at the impact it’s having on the US market.
USUALLY the rest of the world, including the oil and gas upstream sector, takes tank storage for granted. It is just a stop for petroleum and refined products on the way to buses, cars or boats.
But with COVID-19 quarantines slashing global energy demand by as much as 30%, even the historic production cut agreement with OPEC+, combined with significant capex cuts by non-OPEC producers, still leaves much more production than the market will bear.
Excess production of both oil and refined products is running out of places to go. In April, Texas Railroad Commissioner Ryan Sitton predicted all available storage would fill within 50 days. That was before the OPEC+ a...