The Top Energy Stories Of 2020

Pump Jack, Oilfield, Oil, Fuel, Industry, Petroleum

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Some years there is an energy story so big that there’s no question it belongs at the top of the list. The Deepwater Horizon oil spill in 2010. The Fukushima Daiichi nuclear disaster in 2011.

In 2020, that story was the emergence and subsequent consequences of the Covid-19 pandemic.

1. Covid-19 pandemic wreaks havoc on the energy sector

Many of the big energy stories of 2020 are directly attributable to the fallout from the Covid-19 pandemic. Oil demand was crushed beginning in the first quarter as stay-at-home orders were implemented. Airline travel plummeted. Demand for gasoline plunged to a 50-year low. Ethanol demand for gasoline blending fell sharply.

Oil prices fell all the way into negative territory, and U.S. oil production fell in response. Oil companies saw their share values get crushed. All of those are major energy stories, but all were a result of the pandemic.

2. Saudi Arabia/Russia price war

In 2019, global oil prices remained under pressure due to growing U.S. shale oil production. In December 2019, OPEC and Russia attempted to respond to sliding oil prices with new production cuts. But then in January, oil demand also began to be impacted as China took measures to control Covid-19.

OPEC members met with Russia with the hope of announcing additional production cuts that might stabilize oil’s free fall. This time Russia refused and Saudi Arabia slashed oil prices in response. The result was the beginning of a steep slide in oil prices that worsened as the pandemic gained a foothold in the U.S. In just about any other year, this may have been the top story, but this is another story that is in part a consequence of the pandemic.

3. Natural gas prices fall to the lowest levels in over 20 years

One of my 2020 energy sector predictions — which predated the pandemic — was that we would see the lowest average annual natural gas price in more than 20 years. The previous 20-year low happened in 2016 when natural gas prices averaged $2.52/MMBtu for the year.

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