Oil glut falls, but misery goes on
Price retreats amid more cuts, bankruptcy
Crude inventories in the U.S. declined last week for the first time since January, the Energy Department said Wednesday.
The reduction, however, failed to boost the price of U.S. oil and didn’t halt the continued economic fallout that on Monday included a Houston company’s bankruptcy and further spending cuts at a Canadian pipeline operator.
The stockpiles of commercially available oil declined by 700,000 barrels after 15 consecutive weeks of increases as social distancing measures and business shutdowns during the coronavirus pandemic crushed oil demand. Crude inventories are still 11 percent above average for this time of the year.
The price of U.S. oil retreated and settled at $25.29 after the Energy Department report, as traders had
hoped for a sharper decline.
U.S. oil production last week fell by 300,000 barrels a day t0 11.6 million barrels a day, down from a peak early this year of 13.1 million barrels a day.
Still paying the price
In an attempt to weather the ongoing oil crash, Canadian pipeline operator Enbridge on Wednesday said it is offering early retirement, leaves of absence or parttime work to eligible employees as part of a plan to cut its budget by $300 million.
Enbridge also is reducing worker wages, cutting the pay of CEO Al Monaco by 15 percent and taking 10 percent off the wages of executive vice presidents.
"These actions are meant to avoid layoffs, which remain our last resort," the company said.
Enbridge, which has 1,100 employees in Houston, lost $1.4 billion in the first quarter as it reduced the value of some assets by $1.7 billion
Also Wednesday, Freedom Oil and Gas filed for bankruptcy protection, unable to pay more than $10 million in debt during oil’s collapse.
Maverick Drilling
The Houston oil exploration and production company formerly known as Maverick Drilling Services plans to sell all of its assets to Australian environmental services company Sendero Resources. The federal bankruptcy court in Houston will have to sign off on the deal.
Freedom joins other U.S. energy companies, including Whiting Petroleum, Skylar Exploration and Diamond Offshore, during the historic oil industry crash.