Energy Explosion: 10 Trends to Watch in Energy Restructuring -

On April 20, 2020, U.S. benchmark crude traded negative for the first time. This drastic drop in price was caused by the perfect storm of the Saudi Arabia-Russia price war and the novel Coronavirus. The pandemic has halted demand for gasoline, jet fuel and diesel; bringing to a standstill the world’s consumption of tens of millions of barrels of oil every day. Thus, simultaneously with the decrease in price, the decrease in demand on account of the pandemic increased the global supply of oil. These two events have driven the oil and gas industry into economic crisis. On April 1, 2020, Whiting Petroleum became the first major shale bankruptcy filed in the current crisis. On April 26, 2020, Diamond Offshore Drilling became that second major victim of the oil market crash thus far, and more are expected to follow. Here are the trends to watch and events to take note of as the energy industry turns to restructuring advisors to address the current crisis:

1. Reduced Demand/Oversupply of Oil: According to Reuters, fuel demand has declined approximately 30% worldwide—producing a glut of oil. This has left energy providers with millions of barrels in storage.

2. Crude Futures Turned Negative: West Texas Intermediate crude futures turned negative for the first time in history.