The US oil industry is facing an unprecedented crisis in light of declining demand and falling prices, and a number of producers believe that the victory of the Democratic candidate, Joe Biden, as president of the United States, may make matters worse.

A report by the American oilprice website by writer Szvetana Paraskova says that the demand for oil in the United States is still witnessing a continuous decline, while an increasing number of producers are struggling to expel the specter of bankruptcy;

Because of debt accumulation and lower prices.

The writer added that oil prices may remain low until the end of 2021, which increases pressure on the shale oil industry in the United States.

US company executives believe that West Texas Intermediate crude oil prices should exceed $ 46 a barrel for a tangible boom to occur in completing incomplete drilled wells.

For American consumers, gasoline prices at the beginning of October reached their lowest levels in such a period of the year, for the first time since 2016;

However, producers view the lower gas prices with much apprehension, as it is expected that small exploration and production companies will be severely affected as a result, and that bankruptcies will increase in the coming period, according to the Oil Price report.

Pessimistic forecast

An executive in an exploration and production company says in the latest energy study issued by the Federal Reserve Bank of Dallas in mid-September that "the global oil suppliers (OPEC, Russia and shale oil producers) have enough oil to offer it to the market at prices ranging between 40 and 50 dollars per barrel. "Only large producers and companies will survive, especially in the United States," he adds.

According to the study, 66% of executives in 154 exploration and production companies believe that US oil production has reached the peak of the crisis, and that in order to recover, it needs WTI prices to rise from $ 40 to $ 46 a barrel.

Biden pledged to prioritize renewable energies and ban more land from leasing oil and gas exploration companies (Reuters)

Another executive said that oil prices are currently very low and do not allow a recovery, stressing that there will be no recovery as long as oil demand remains low.

Capital Economics said in a recent report that in light of low prices and the financial problems that producers are going through, it is difficult for US shale oil to regain pre-pandemic levels before the end of 2022, if the recovery takes place in the first place.

What if Biden won the presidency?

Writer Szvetana Paraskova says oil demand could continue to decline, not only because of the epidemic and consumer behavior;

But also because of the possibility of a new administration in the White House.

In addition to producer concerns about declining profits and high debt levels, the US oil industry faces a major challenge with the increase in the number of investors moving towards alternative energies.

According to the author, the victory of Democratic candidate Joe Biden in the presidential elections could support this trend, as Biden pledged to give priority to renewable energies, reduce carbon dioxide emissions, and ban more land leases to oil and gas exploration companies.

In the study prepared by the Federal Reserve Bank of Dallas, executives expressed their fear that Biden would win the presidential election, and one said, "The November elections could jeopardize his successful projects if Biden were elected." Biden is completely on the US shale oil industry. "

American crude prices fell in trading on Wednesday to $ 40.02 a barrel, with the continued decline in fuel demand in light of the high number of Coronavirus infections in Europe and the United States, the largest consumer of crude in the world, according to Reuters.

The monthly report of the Organization of Petroleum Exporting Countries (OPEC) said yesterday that oil demand in 2021 will increase by 6.54 million barrels per day to 96.84 million barrels per day, 800 thousand barrels less than expectations a month ago, due to the economic disruptions caused by the pandemic. Corona.