Energy consumption falls amid COVID-19 pandemic

By Alex Mills   July 30, 2020 Demand for energy dropped to historic lows across the United States in April, according to a new report from the Energy Information Administration. The COVID-19 pandemic created a collapse in economic activity since the beginning of the year. The oil and gas industry has been especially hard hit. The three largest service companies – Schlumberger, Halliburton, and Baker Hughes (BJ Services) – announced recently massive layoffs. Schlumberger, the largest, said 21,000 employees will lose their jobs. During the next several weeks, all public companies will be announcing their second quarter financial reports and it will be a surprise if any company can report a profit. EIA reported on Wednesday that American consumers used the lowest amount of energy in April since September 1989, and consumption fell 14 percent compared to April 2019, which was the largest year-over-year decrease since EIA started monitoring energy consumption in 1973. April was the height of stay-at-home measures enacted to mitigate the spread of COVID-19, which caused a large drop in transportation, industrial, and commercial sector energy consumption, EIA stated. The huge decline in consumption has been a major contributor to an oversupply of oil and natural gas, which has resulted in lower prices and lower prices have resulted in negative financial performance. Oil prices dropped from $60 per barrel in January to $15 on April 1, the first day of the second quarter. Oil closed at $41.30 on Wednesday for West Texas Intermediate (WTI). Meanwhile, crude oil inventories declined from 536 million barrels last week to 525 million barrels this week. Inventories remain near the record high of 540 million barrels set just a month ago....  
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