Since the Covid-19 is introduced to the world, it has impacted several economies and industries of the world. There would be hardly any industry or a country that might not have been affected by this pandemic. Several professionals have lost their jobs, many businesses have shut down, and numerous economies have collapsed, and so on so forth. Similarly, Covid-19 has badly affected the US Oil Market as well.
The Oil and gas market has suffered tremendously since the beginning of 2020 when Covid-19 was new to the world. The overall energy sector has experienced downwards earning revisions by dreadful oil value break down in 2020. Since, January 2020, the reduction in oil prices is stated to be around 50%.
This is reported as one of the lowest prices in the history of the US market. Such a decrease in oil rates was never experienced before. Due to Covid-19, the whole world was quarantined and each country faces a strict lockdown. Now due to such circumstances, the demand for oil and gas drops extensively as the complete activity of the world was blocked. Global energy bodies reported a huge downfall of oil prices in April 2020. The figures were shocking for the world as the demand almost reduced by 29 million barrels per day in the same month.
The oil and gas sector experienced oversupply and less demand in April 2020 that leads the market to crash badly. This horrifying loss does not only affect the oil and gas sector. But, all the divisions that were linked with the oil and gas industry were also affected. Sectors like plastic, chemical, and automotive divisions were badly damaged by this market crash.
The US oil market break-down has also introduced a liquid storage crisis in the market. Several facilities reached the highest capacity. It was 20 April 2020 when US oil prices diminish to minus. This was the first time the US market experienced such a terrible crash. An oil storage facility affected so badly that the manufacturers were paying the money for oil deliveries. The planning, forecasting, and budgeting of all the big oil companies including Exxon and Shell were badly affected.
The oil and gas market collision in the US market affected few linked countries as well. The economy of the Middle East and Africa also got badly affected by this market crash. There would be a testing period for their economies as it is not sure when the situation would be back to a normal state. Numerous projects have badly affected by this situation and almost everyone has stopped and delayed their projects. Several construction projects are experiencing additional inspection as fear cultivates about feasibility in the present economic atmosphere.
Moreover, this collision has badly exaggerated trade and transportation as well. The overall supply chain structure has also affected by the collision of the US oil market. Numerous projects worth millions are affected. Few are in the delay process, while rest are abandoned. Cheap Essay Help, can provide data from such companies that have completely discarded their projects.
The struggle is still in the process to recover the imbalance stream of oversupply and less demand in the market. Companies are fighting back to recover the extreme losses and planning further relevant steps to improvise their current position from such a situation.
Currently, strict lockdown policies are reducing from all over the world. This news would bring a little hope as several countries are planning and trying to improve their financial position from such a massive loss in the oil and gas market. But, a problem does not seem to be solved as easily as the Covid-19 pandemic still exists in the world. It will take a few months to get things back to a normal state.
The whole sector of the world is affected. From producers to transportation businesses, traders, storage companies, service organizations, almost every single sector is badly affected. This won’t be so easy to recover until this pandemic diminishes as various factors need to be recovered and this could only happen when such a pandemic is completely gone.
The vital recovery factor is the labor force. As now the current situation is getting better, the workforce situations are also improving. But, still, the labor force quantity is not enough as compared to the early days. The labor force is crucial for the recovery process as a low workforce would result in low production. This is the reason why the economy of every country is dependent on the workforce. Currently, the available workforces have to follow some safety rules and procedures. Furthermore, such rules are also affecting their productivity as compared to past periods.
Various companies have cut down their labor force from their production sites. Few companies have reduced their workforce to recover their losses. The remaining organizations cut down their workforce for safety purposes as they did not want the virus to spread in a quantity.
The strategy of cutting down the workforce is now implemented by almost every company. This is all due to the current scenarios as the financial position of every business is down and facing massive losses. Therefore, huge numbers of companies have fired hundreds of employees and still more organizations are planning to do so. The purpose of such a strategy is to recover the losses that have occurred in these periods.
Overall, the sector is experiencing one of the most difficult times in history due to Covid-19. Such a moment was never faced before. Every company is planning to recover its losses in its possible manner. But, few companies have tried to avail of the benefit of the current low oil rates.
According to a report, that released on 25th of May 2020 by law essay writers uk, experts that it will take a few more months for the things to get back to normal position. It will take time for the businesses to recover from this pandemic situation and the oil market crash. However, it is good to see the unity among the exporting and importing countries as they are aiming to stabilize the oil market in a superior manner.