WASHINGTON (Pakistan Point News / Sputnik - 21st April, 2020) Saudi Arabia's decision to flood the world with excess oil production threatens to weaken US energy producers to the point where the industry will be unable to recover, Senator Kevin Cramer said on Monday.
"Today's collapse poses a devastating threat to our oil and gas sector, with job losses in the thousands and national security being weakened if the industry cannot recover," Cramer said. "The dramatic low [in oil prices] underscores why we cannot allow Saudi Arabia to flood the market, especially given our storage capacity dwindling."
Earlier on Monday, the price of West Texas intermediate (WTI) crude for delivery in May fell into negative territory for the first time in history, meaning that investors would theoretically pay people to cart away excess crude in their respective inventories. WTI eventually rebounded to finish at $37 per barrel.
The novel coronavirus (COVID-19) crisis has shattered the US demand for oil with much of the nation subject to stay-at-home orders and roads nearly devoid of traffic. That, combined with a Russian-Saudi price war, has produced an unprecedented glut that exceeds storage capacity in many countries.
Another energy state lawmaker, Senator James Inhofe from Oklahoma, called for sanctions against both nations, accusing them of engaging in a conspiracy to crush US oil and gas producers in a bid to capture market share.
