Those with interests in oil production are feeling a bit of relief for the first time in months. After oil prices bottomed out and went into negative territory in April for the first time in history, many oil companies were fearing imminent bankruptcy. Now, with areas of the country re-opening, there is a slow rebound occurring.
Positive Outlook: Oil Prices are on the Rise
While oil prices have not returned to where they were before stay at home orders were first put in place, prices appear to be headed in the right direction. On May 4th, 2020 U.S. Crude Oil prices spiked to $24 a barrel or 20% which is the highest it’s been since April 13.
Likewise, Gas Buddy reported on May 7 that gasoline demand was up over 8% from the previous Wednesday, the highest Wednesday demand since March 18th when stay at home orders began being issued nationwide. Demand is up 15.67% from the lowest Wednesday demand on March 25, 2020. While an improvement, overall demand is still down more than 30% of what it had been before March 11 when stay at home orders began impacting demand.
More Movement Leads to Increased Demand
The rise in prices comes as many US residents are venturing out for the first time in weeks. As stay at home orders are easing, consumers are again heading to the fuel pumps to fill their tanks to get to the store and in many cases, back to work. Large cities such as Houston, Austin, San Antonio, and even New York City have seen increases in traffic which will drive fuel demand and oil prices up.
Not only are people heading back to work, but as states such as Georgia and Texas reopen for business, residents who have been suffering from cabin fever are emerging to visit the beach or the lakes. These ventures out to enjoy the warming weather are requiring gasoline, further boosting demand and cost.
For now, oil companies and investors will have to keep their fingers crossed that there will not be a resurgence of the disease with less social distancing occurring. Continued opening and decreased fear of the virus will bode well for the oil industry moving forward. Cautious optimism is certainly warranted but the chance of a fall outbreak of the virus will temper rebound celebrations for now.
MSI Provides Industry Insights and Asset Protection
Prices are constantly changing in the oil industry and we enjoy providing industry updates. We hope you’ll consider letting MSI Pipe Protection Technologies help position your company to successfully protect your assets even in uncertain times. Speak with one of our experts toll-free today by calling 877-276-9208.