Infographic: Three Charts about the Petroleum Industry

The COVID-19 pandemic was unprecedented for many reasons, but the energy industry will never forget one first: Negative prices for crude oil. For a short period in the end of April 2020, commodities traders were trying—without luck—to find buyers for May oil futures contracts and resorted to paying people to take the oil. The oil market stabilized over the summer and stayed within a narrow range around $40 a barrel.
 
The price for oil depends on a balance of supply and demand. It also relies on the economics of oil fields: There are prices so low as to make pumping existing wells unprofitable, and prices so high as to encourage new drilling. The forecast prices for crude oil produced in the U.S. suggest that the petroleum industry will receive neither signal. Until demand for oil rises—which likely won’t happen until U.S. drivers start commuting to work and taking vacations by car—prices won’t support widespread new drilling. These three charts tell the tale.