Market turmOIL

Q: What is going on with oil markets now? Is it:

Peak,
Valley,
Demand-driven,
Supply-driven,
Globalization,
Deglobalization,
Calamity,
Opportunity,
Orchestrated,
or Accidental?

A: Yes.

All of these realities really do seem to be part of the oil-market landscape in this pandemic season in which the futures market for oil went sharply negative for the first time in history, two days ahead of the 50th anniversary of Earth Day.

This did not mean that we were being paid to fuel our jalopies, but it did mean that many changes are afoot in this most important industry. The causes and consequences for economies, employment, and the environment are complicated.

Pumping Oil at Negative (in theory) Prices
Image: Getty via On Point

Journalist extraordinaire Meghna Chakrabarti led an excellent discussion of the countervailing winds facing the oil industry in Low Prices, Full Storage Tanks: What's Next For The Oil Industry, part of the On Point program's Coronavirus Hours series. She gathered an interesting guest list for this discussion. The hour opens with an energy and economy reporter and the owner of a small oil company, both from Texas. Most of the time is spent with a petroleum economist and an international affairs specialist. The combination is an excellent one, and even the economist has some valuable insights.

Most intriguing: the economist suggests that some oil might be left in the ground at the end of all the transitions being discussed. Whether or not this is possible is, from the point of view of climate disruption, the most important of the many topics covered in this fascinating hour.

Bonus: The On Point production team has included an extensive reading list on the episode web page for exploring all of these questions further.

Lagniappe: