Here's How $20 Oil Could Become a Reality If Storage Runs Out

[Purveyor]

There's the makings of a crisis swirling in America's oil-storage tanks, and the next few months will determine whether it's a minor annoyance, or a major blow, to U.S. oil.

The basic problem is that too much oil is being pumped, and not enough is being used up. America is running out of places to store all of the excess crude. That’s a problem, and it could send prices plummeting -- some say to $20 a barrel or even lower. (For context: Last summer it was more than $100, and today it's less than $50.)

That's probably not going to happen, but it's not as crazy as it might first sound. Stockpiles are at record-high volumes after 10 straight weeks of increases. The U.S. is currently accumulating an extra one to two million barrels a day more than its using. The oil imbalance is bad, and it's still getting worse.

If oil inventories begin to top out, the consequences will be severe for the industry. The price of oil will plummet. Imports will probably take the first hit, followed by a curtailment of U.S. production. Bloomberg Intelligence crunched the numbers and found that the possibility of running out of storage space is high enough, and the consequences severe enough, that the risk should be taken seriously.

That's the subject of our animated explainer: America's Storage Problem.

more...

http://www.bloomberg.com/news/articles/2015-03-24/here-s-how-20-oil-could-become-a-reality-if-storage-runs-out

[NYC_SKP]

1. We need to skip the petroleum storage problem and tackle the electrical energy storage problem.

We need to:

Move toward electrifying all ground transportation, public, private, freight, cars, trucks, all of it.

Move toward 100% renewable generation from Wind, Solar, Hydro, Geothermal, and some Biomass.

Promote and deploy Smart Grid, VTG, Smart Meters, and more and more distributed generation.

Key to everything above is finding solutions to storage.

Pumped Hydro, Kinetic, Battery Banks, and some that have yet to be invented-- these will be the deal changer.

And we'll look back and laugh at ourselves for extracting more oil than we can use.... That problem is pretty funny when you think about it.

[rurallib]

2. wish I could rec this reply

[SoLeftIAmRight]

3. sounds like it will soon be time to fill the The Strategic Petroleum Reserve

bet the pugs will want to wait until the price gets back above 100

[bleedinglib]

4. bush oil !!

I often wonder what happened too all that oil W had pumped into the salt mine in Louisiana? It was pumped from fields in Texas about 200 miles away That made his buddies richer & cost the consumer about #1.50 more per gallon ??