Oil demand remains low. The storage capacities are gradually used up. Shell is now in the red.
- Oil prices are in the basement as a result of the coronavirus pandemic.
- The low demand in times of lockdown leads to low prices from the oil countries.
- The British-Dutch oil company Shell is now reporting that it has slipped into the red.
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London / Amsterdam - The British-Dutch oil company Shell has slipped into the red due to the massive drop in oil prices. Shell made a loss of $ 24 million in the first quarter, the company said on Thursday. Shell had reported a profit of $ 6 billion in the prior-year period .
The second quarter will also be difficult, Shell said. The fall in prices had started with the spread of the corona pandemic in March and continued in April. The price of crude oil from the United States has even dropped below zero for the first time in history.
Corona crisis: Oil prices drop - Shell slips into the red
The demand for the raw material has decreased significantly in the corona crisis because less oil is needed. At the same time, storage capacities in the USA have almost been used up. The most important producing countries recently agreed on a significant reduction in funding, but so far this has had no effect on prices.
Shell CEO Ben van Beurden said on Twitter: “In extremely challenging conditions, Shell stands up to protect our people and support communities around the world. We are taking prudent steps to strengthen our resilience. "
"Under extremely challenging conditions, Shell is stepping-up to protect our people and support communities globally. We are taking prudent steps to bolster our resilience, underpin our balance sheet strength and support value creation," Shell CEO Ben van Beurden. #ShellResults pic.twitter.com/1EXtBl5Eo5
- Shell (@Shell) April 30, 2020Shell announced plans to cut crude and natural gas production and processing in the second quarter. Shell CEO Ben van Beuren also said on Thursday that the dividend would be cut - for the first time since the 1940s. The company announced in March that it would reduce its investments by $ 5 billion to $ 20 billion.
Corona crisis: Shell slipped into the red
Even rival BP is suffering from the decline in prices. BP lost $ 4.4 billion in the first quarter. CEO Bernard Looney has already announced layoffs.
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The pressure on the market is also immense in view of the price war with Saudi Arabia. This has also had an impact on the Russian oil market in recent weeks. So far, the drop in oil prices has also had a partial impact on consumer prices.
