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The Paris-based IEA says the global roughly 5 million barrels a day of oil isn't attracting a premium high enough to offset the cost of
off-field extraction.
The IEA said in the report that prices available to producers in Western Canada have fallen to single digits, and other grades have also seen negative prices in parts of North America
.
Oil producers have taken steps to slash spending on new production, 20 to 35 percent
from previously planned spending budgets for 2020, the report said.
The IEA earlier estimated that net income in some producing countries fell by 50%-85% in 2020 compared to 2019, but the decline could be even greater
depending on the magnitude of the demand shock.
Many oil majors will reassess their existing portfolios, which could lead to another round of refinery closures
.
The agency also warned that the impact of the collapse in oil prices on other energy sectors, combined with a prolonged period of low oil prices, will affect the prospects
for the transition to clean energy sources such as natural gas.
"A $25 per barrel oil price will make it difficult for some international gas suppliers to cover their operating costs, and a sluggish spot market for gas will not help
.
"
The Paris-based IEA says the global roughly 5 million barrels a day of oil isn't attracting a premium high enough to offset the cost of
off-field extraction.
The IEA said in the report that prices available to producers in Western Canada have fallen to single digits, and other grades have also seen negative prices in parts of North America
.
Oil producers have taken steps to slash spending on new production, 20 to 35 percent
from previously planned spending budgets for 2020, the report said.
The IEA earlier estimated that net income in some producing countries fell by 50%-85% in 2020 compared to 2019, but the decline could be even greater
depending on the magnitude of the demand shock.
Many oil majors will reassess their existing portfolios, which could lead to another round of refinery closures
.
The agency also warned that the impact of the collapse in oil prices on other energy sectors, combined with a prolonged period of low oil prices, will affect the prospects
for the transition to clean energy sources such as natural gas.
"A $25 per barrel oil price will make it difficult for some international gas suppliers to cover their operating costs, and a sluggish spot market for gas will not help
.
"
