Oversupply vs Storage (and when do we run out of it?)

[Dan Clemmensen + 1,011]

2 minutes ago, Gerry Maddoux said:

That's not exactly right. At this point, due to the grossly inappropriate actions of a Saudi prince pumping hard during a time of a global catastrophe, the United States should adopt protectionist policies. That would mean a) placing a stiff tariff or a complete embargo on Saudi oil, and b) utilizing our own domestic oil for the petroleum operations in our own country. 

In that circumstance, we no longer care how much the KSA pumps, they just can't bring it to the US, or if so, they'll pay a tariff so high they'll go other places. Canada, our loyal ally during several wars, our land neighbor, has plenty of heavy crude to mix with our LTO to serve up the perfect feedstock to our aging refineries. 

In other words, with a virtual embargo, the KSA is set adrift, to resort to their own devices. We in the United States use our domestic product. They in the kingdom sell theirs where they wish--just not here. 

It would appear to me that this is where we are going. And if we're not, we should be. And trust me, the UK is going to be in a world of hurt when this pandemic is over--they will be importers of our oil. Maybe the EU too, but I wouldn't count on it. 

The Kingdom of SA has generated so much bad will by pumping to drive down the price that not very many countries will lift a hand to help them. If President Trump does, it's because he doesn't understand the American oil business.  

All true. I think we should embargo or tariff all non-Canadian imports. But in December, before the Covid-19 slump we pumped more oil than we used, so we will still need to quit/slow pumping until after the demand eventually returns from the slump and then a bit longer to empty the most costly storage. That will be the new normal. The Saudis can and will outbid us for our export demand, so we will not regain our export markets and we will therefore not pump as much as we do now.

[ceo_energemsier + 1,818]

2 hours ago, Gerry Maddoux said:

If Saudi Arabia can't get oil to their refinery in the US, they're dead in the water, unless they suddenly see the light and cut production.

The Saudis will get oil to their refinery, they buy/export/trade a lot of US shale crudes and GoM crudes, they have their ARAMCO Trading who does all that and have access to plenty of US oil. They are buying and selling US crude to China.

[Rob Kramer + 696]

Suncor just reduced budget and estimates 100k boe/d of their products reduced.  12% . They can refine transport or sell at the pumps most of their current production. Also some projected they listed as on hold for 2 years  or longer.

[Chris Tarjeft + 22]

Rather than worrying about filling a reserve tank.  Should the U.S. not consider just buying out the Shale Producers? Then no need to pump the oil at all, other than minimally just to maintain the wells and when the existing reserve gets low start pumping?  The oil underground would actually be the reserve in this case?

Edited March 24, 2020 by Chris Tarjeft

[ceo_energemsier + 1,818]

17 minutes ago, Chris Tarjeft said:

Rather than worrying about filling a reserve tank.  Should the U.S. not consider just buying out the Shale Producers? Then no need to pump the oil at all, other than minimally just to maintain the wells and when the existing reserve gets low start pumping?  The oil underground would actually be the reserve in this case?

The US Gov. could buy equity and offer loans to shale companies, but then its about how do you pick winners and losers? based on their debt and production and quality of their rock and the techs they use and how they use them.

[ceo_energemsier + 1,818]

For Good Reasons, Industry Doesn’t Want Tariffs or Quotas

 

https://www.api.org/news-policy-and-issues/blog/2020/03/23/for-good-reasons-industry-doesnt-want-tariffs-or-quotas

[Dan Clemmensen + 1,011]

19 minutes ago, Chris Tarjeft said:

Rather than worrying about filling a reserve tank.  Should the U.S. not consider just buying out the Shale Producers? Then no need to pump the oil at all, other than minimally just to maintain the wells and when the existing reserve gets low start pumping?  The oil underground would actually be the reserve in this case?

Why spend taxpayer dollars on this? We get the same effect by letting the market do it and it's more efficient.

[ceo_energemsier + 1,818]

The Boldest Permian Plays To Watch As The Oil Market Circles The Drain

 

https://finance.yahoo.com/news/boldest-permian-plays-watch-oil-210000897.html

 

[Dan Clemmensen + 1,011]

5 minutes ago, ceo_energemsier said:

For Good Reasons, Industry Doesn’t Want Tariffs or Quotas

 

https://www.api.org/news-policy-and-issues/blog/2020/03/23/for-good-reasons-industry-doesnt-want-tariffs-or-quotas

I just read it. His argument is against tariffs and quota on materials needed to expand drilling, no on crude, and his economic examples ('73 Arab oil embargo, later recessions) do not apply to the unique abrupt drop in demand. Even at a price of $.50/gal at the pump, people who cannot go anywhere won't buy gasoline. We have a very short-term problem that may require a short-term quick-and-dirty fix. He even states that his arguments apply in the long term, not the short term.

[Gerry Maddoux + 3,627]

11 hours ago, Dan Clemmensen said:

But in December, before the Covid-19 slump we pumped more oil than we used,

That's not correct. We produced about 10 million barrels a day, exported some, but imported about 8 million barrels a day. 

What I'm saying is keep our own oil and use it, adding with it as much heavy crude (preferably from Canada) as the refineries need. Just cut off exports, cut off imports (except a few million barrels a day from Canada). 

[Dan Clemmensen + 1,011]

12 minutes ago, Gerry Maddoux said:

That's not correct. We produced about 10 million barrels a day, exported some, but imported about 8 million barrels a day. 

What I'm saying is keep our own oil and use it, adding with it as much heavy crude (preferably from Canada) as the refineries need. Just cut off exports, cut off imports (except a few million barrels a day from Canada). 

We are still in agreement. My wording was sloppy. We are still an importer of crude, but we are a net exporter when you include refined products. That's why we would still have excess crude to export if we do not slow down production after implementing your proposed actions. Refineries are cutting production because demand for gasoline has dropped.

[ceo_energemsier + 1,818]

12 minutes ago, Dan Clemmensen said:

We are still in agreement. My wording was sloppy. We are still an importer of crude, but we are a net exporter when you include refined products. That's why we would still have excess crude to export if we do not slow down production after implementing your proposed actions. Refineries are cutting production because demand for gasoline has dropped.

We were also exporting a lot of refined products, but that demand has dropped, not just for gasoline but also for jet fuel, diesel and fuel oil for shipping. So refineries have cut their overall run rates down to 50-60%, some refineries have completely shut down.

 

__________________________

 

How much petroleum does the United States import and export?

 

In 2019, the United States imported about 9.10 million barrels per day (MMb/d) of petroleum from nearly 90 countries. Petroleum includes crude oil, hydrocarbon gas liquids, refined petroleum products such as gasoline and diesel fuel, and biofuels (including ethanol and biodiesel). Crude oil imports of about 6.79 MMb/d accounted for about 75% U.S. total gross petroleum imports in 2019, and non-crude oil petroleum accounted for about 25% of total gross petroleum imports.

In 2019, the United States exported about 8.57 MMb/d of petroleum to about 190 countries and 4 U.S. territories. Crude oil exports of about 2.98 MMb/d accounted for 35% of total gross petroleum exports in 2019. The resulting total net petroleum imports (imports minus exports) were about 0.53 MMb/d in 2019.

The top five source countries of U.S. gross petroleum imports in 2019 were Canada, Mexico, Saudi Arabia, Russia, and Colombia.

https://www.eia.gov/tools/faqs/faq.php?id=727&t=6

[Dan Clemmensen + 1,011]

33 minutes ago, ceo_energemsier said:

We were also exporting a lot of refined products, but that demand has dropped, not just for gasoline but also for jet fuel, diesel and fuel oil for shipping. So refineries have cut their overall run rates down to 50-60%, some refineries have completely shut down.

[...]

In 2019, the United States imported about 9.10 million barrels per day (MMb/d) of petroleum from nearly 90 countries. Petroleum includes crude oil, hydrocarbon gas liquids, refined petroleum products such as gasoline and diesel fuel, and biofuels (including ethanol and biodiesel). Crude oil imports of about 6.79 MMb/d accounted for about 75% U.S. total gross petroleum imports in 2019, and non-crude oil petroleum accounted for about 25% of total gross petroleum imports.

In 2019, the United States exported about 8.57 MMb/d of petroleum to about 190 countries and 4 U.S. territories. Crude oil exports of about 2.98 MMb/d accounted for 35% of total gross petroleum exports in 2019. The resulting total net petroleum imports (imports minus exports) were about 0.53 MMb/d in 2019.

The top five source countries of U.S. gross petroleum imports in 2019 were Canada, Mexico, Saudi Arabia, Russia, and Colombia.

https://www.eia.gov/tools/faqs/faq.php?id=727&t=6

There is a reason I said "in December" and not "in 2019". We were a net importer for the year, but the trend was steadily decreasing net imports culminating in a net export in December. That was the best pre-Covid-19 data point we had.

[Rob Kramer + 696]

2 hours ago, Dan Clemmensen said:

I just read it. His argument is against tariffs and quota on materials needed to expand drilling, no on crude, and his economic examples ('73 Arab oil embargo, later recessions) do not apply to the unique abrupt drop in demand. Even at a price of $.50/gal at the pump, people who cannot go anywhere won't buy gasoline. We have a very short-term problem that may require a short-term quick-and-dirty fix. He even states that his arguments apply in the long term, not the short term.

Alot of "crews" young guys with sport cars driving all over canada right now .... nothing to do but drive the car you love on (mostly) empty roads and with cheap fuel. I'm stocking up on gas for boating season ... even tho its winter fuel. 

[BJblue + 12]

I too, wonder where all this(the worlds) oil is going. But, storage capacity? I remember reading several years back when China went on a "storage tank" building boom. I think some of f the articles about this were on this site. This seemed to go on for a few years & seems like I remember thinking I heard tens of thousands of large storage tanks being built?  Wouldn't surprise me if theY even built several hundred thousand storage tanks. Does anyone here think the CCP wants anyone to know how much capacity they have...to store?  I would think they are filling them to the top @ these very low prices. I see China coming out of this by saving $100s of Billions in future uel costs.   

[Dan Clemmensen + 1,011]

17 minutes ago, BJblue said:

I too, wonder where all this(the worlds) oil is going. But, storage capacity? I remember reading several years back when China went on a "storage tank" building boom. I think some of f the articles about this were on this site. This seemed to go on for a few years & seems like I remember thinking I heard tens of thousands of large storage tanks being built?  Wouldn't surprise me if theY even built several hundred thousand storage tanks. Does anyone here think the CCP wants anyone to know how much capacity they have...to store?  I would think they are filling them to the top @ these very low prices. I see China coming out of this by saving $100s of Billions in future uel costs.   

You cannot hide a storage tank from a satellite. Satellite imagery not only shows the tanks, it shows how full they are (based on the shadow pattern, which changes as the cap rises). The folks who estimate the world's total storage capacity and how full it currently is know what they are doing. Not just China: anyone with any storage capacity will fill it. That is the whole point of this discussion: look at the topic title.

[0R0 + 6,251]

19 hours ago, Dan Clemmensen said:

The articles I have read in the last few days computed global available storage of all types, global supply, and global demand. Available storage includes all the possible places you can put the oil, meaning all countries' SPRs, all VLCCs, all tankage, all pipelines, etc. that have available capacity. At the global level, the number I recall is 1.5 billion bbl of current available storage capacity, and the excess global supply (supply minus demand) is 20 million bbl/day. If my poor memory is correct, the world, not just the US, runs out of storage in 75 days, so we have that long to reduce supply by 20 million bbl/day. If we reduce at a linear rate, we must equalize in 150 days so every day starting now we need to reduce by another 133,400 bbl/day of production. This is worldwide. As storage cost would increase dramatically as we near capacity, it is more realistic to equalize in 100 days, so the world needs to turn off an additional 200,000 each day. I have zero knowledge of what you do to turn off an oil well. How many wells need to be turned off to stop 200,000 bbls? Do I just call up the foreman can say "Joe, turn off well # 65 today"?  After supply is reduced to match demand, the oil in expensive storage must be retrieved and sold, so new supply must continue to be reduced further, lets say at the same 200,000 bbls turned off each day until we get to (say) a supply deficit of 5 million bbl/day, until demand recovers.

At a sufficiently large contango, the storage is unlimited since you can store in old wells that are still connected to well maintained pipeline infrastructure. It is just a matter of having enough arbitrage space to cover the costs of shipping, pumping and retrieval. Someone suggested here that the Hugoton field is still hooked up to a well maintained pipe network and full of storage opportunities in depleted wells. 

Heavy crude in Venezuela and Mexico can actually be recovered by injecting LTO into the reservoirs to obtain both storage now, and enhanced production later. 

[0R0 + 6,251]

5 hours ago, Chris Tarjeft said:

Rather than worrying about filling a reserve tank.  Should the U.S. not consider just buying out the Shale Producers? Then no need to pump the oil at all, other than minimally just to maintain the wells and when the existing reserve gets low start pumping?  The oil underground would actually be the reserve in this case?

Bad idea. Think Nancy Pelosi owning the oil resources.

[Dan Clemmensen + 1,011]

4 minutes ago, 0R0 said:

At a sufficiently large contango, the storage is unlimited since you can store in old wells that are still connected to well maintained pipeline infrastructure. It is just a matter of having enough arbitrage space to cover the costs of shipping, pumping and retrieval. Someone suggested here that the Hugoton field is still hooked up to a well maintained pipe network and full of storage opportunities in depleted wells. 

Heavy crude in Venezuela and Mexico can actually be recovered by injecting LTO into the reservoirs to obtain both storage now, and enhanced production later. 

Thanks for this info. Nobody has mentioned it so far, so I assumed from the cost-of-storage arguments that storage is limited. If old wells can be used quickly and cheaply, the entire argument disappears. If there is a high cost or a long lag, we still have a short-term problem. What are the cost and technical tradeoffs between this approach and just slowing down pumping?

[0R0 + 6,251]

16 hours ago, Dan Clemmensen said:

16 hours ago, Gerry Maddoux said:

That's not exactly right. At this point, due to the grossly inappropriate actions of a Saudi prince pumping hard during a time of a global catastrophe, the United States should adopt protectionist policies. That would mean a) placing a stiff tariff or a complete embargo on Saudi oil, and b) utilizing our own domestic oil for the petroleum operations in our own country. 

In that circumstance, we no longer care how much the KSA pumps, they just can't bring it to the US, or if so, they'll pay a tariff so high they'll go other places. Canada, our loyal ally during several wars, our land neighbor, has plenty of heavy crude to mix with our LTO to serve up the perfect feedstock to our aging refineries. 

In other words, with a virtual embargo, the KSA is set adrift, to resort to their own devices. We in the United States use our domestic product. They in the kingdom sell theirs where they wish--just not here. 

It would appear to me that this is where we are going. And if we're not, we should be. And trust me, the UK is going to be in a world of hurt when this pandemic is over--they will be importers of our oil. Maybe the EU too, but I wouldn't count on it. 

The Kingdom of SA has generated so much bad will by pumping to drive down the price that not very many countries will lift a hand to help them. If President Trump does, it's because he doesn't understand the American oil business.  

All true. I think we should embargo or tariff all non-Canadian imports. But in December, before the Covid-19 slump we pumped more oil than we used, so we will still need to quit/slow pumping until after the demand eventually returns from the slump and then a bit longer to empty the most costly storage. That will be the new normal. The Saudis can and will outbid us for our export demand, so we will not regain our export markets and we will therefore not pump as much as we do now.

I think there should be no response to the Saudi market flooding project. No embargo, no tariff. It is a net benefit for the US to figure out where to store oil that costs less to buy off the market than US production . If we pump it back into the ground, then so much the better to supply the country in the future. It is a gift from Saudi and the ultimate target is more Russia than the shale frackers. They are emptying their domestic and offshore storage in Rotterdam and Egypt. And rushing ships to these markets at a lower price than anything Russia quotes. They have the obvious goal to prevent Russian sales regardless of price. Their target is to deliberately force Russian producers to close the taps first. Something that the US frackers should want as well, since Russian production is the slowest turnaround for switch on and switch off. Particularly Siberian and Arctic oil. Their southern oil fields are much quicker turnaround so I assume those will be shut first. But that depends on which company owns them. 

Remember that the the shale frackers will have their financial and lease costs slashed once they go through bankruptcy restructuring. That will lower their breakevens and consolidate assets with the financially stronger companies. That means BETTER US production economics in the future. 

The US runs on oil. It is a vast sprawling population, that will now expand sprawl indefinitely as dense metro centers turn out to be petri dishes for pandemics, and are already depleting as Millennials mature into being parents riding trucks and SUVs rather than singles piled up in flatshares in downtown metros on buses and subways. We need the world's oil more than anyone else does. So storing cheap underpriced Saudi or Russian crude is precisely the country's best option. It requires no policy but for filling up the existing empty space in the SPR. Otherwise look to the market to fill up the storage. 1 year forward contango allows 41%, 2 year is 55%, 3 year is 63% 4 year is 70% lots of space in the calendar structure to cover transport pipeline and reinjection storage. 

Let the market do its job and we should all be better off for it - eventually.

NOPEC was designed to break sustained high oil prices due to cartel operations curtailing production. 

The Saudis always claimed that if they can be paid in gold then they would open their production to full blast till it is depleted. It was precisely what the US had been pressing OPEC to do for half a century. Surely we should not complain about it when it actually happens. 

 

 

[BJblue + 12]

Dan Clemmenson said, 2 hr ago.:

"You cannot hide a storage tank from a satellite. Satellite imagery not only shows the tanks, it shows how full they are (based on the shadow pattern, which changes as the cap rises). The folks who estimate the world's total storage capacity and how full it currently is know what they are doing. Not just China: anyone with any storage capacity will fill it. That is the whole point of this discussion: look at the topic title"

 

Those satellites really have a hard time  showing underground storage, such a many tanks piped together underground. I'm not saying they have more(probably much more) capacity than we know. I just suspect they do. They are pretty smart guys, those Chinese. But, the CCP are the biggest liars I have ever seen.  And I have only felt that way since watching their responses to the COVID-19 outbreak. They still haven't found a wild animal that carries the disease..." so, let's just blame it on the US military."

[ceo_energemsier + 1,818]

2 hours ago, Dan Clemmensen said:

You cannot hide a storage tank from a satellite. Satellite imagery not only shows the tanks, it shows how full they are (based on the shadow pattern, which changes as the cap rises). The folks who estimate the world's total storage capacity and how full it currently is know what they are doing. Not just China: anyone with any storage capacity will fill it. That is the whole point of this discussion: look at the topic title.

The Chinese have been building/constructing massive storage tanks , both UST and AST, the UST wont show up on any satellite imagery nor would the sats be able to see how full the tanks are if they dont have external floating roofs.

The Chinese have been building these tanks since 2010 if not earlier and in 2012 and in later years they also gave permits to private companies besides the SOEs to build massive storage facilities and import crude oil for national strategic reserves. They have purchased low cost crude oil in the previous oil price crashes and have stepped up their purchases now again.

I have posted on this site previously about the extent of Chinese storage capacities and they have built more storage at break neck pace over the last 2-3 years.

India has built and is building massive cavern storage with the help of Saudis (who know a thing or two about underground and other secure crude storage facilities). The Saudis are also helping them fill it under JV so they can have strategic reserves outside the Middle East, just as they and the Chinese have taken over storage capacities in NWE and the Caribbean and China and Japan.

[0R0 + 6,251]

1 minute ago, BJblue said:

Dan Clemmenson said, 2 hr ago.:

"You cannot hide a storage tank from a satellite. Satellite imagery not only shows the tanks, it shows how full they are (based on the shadow pattern, which changes as the cap rises). The folks who estimate the world's total storage capacity and how full it currently is know what they are doing. Not just China: anyone with any storage capacity will fill it. That is the whole point of this discussion: look at the topic title"

 

Those satellites really have a hard time  showing underground storage, such a many tanks piped together underground. I'm not saying they have more(probably much more) capacity than we know. I just suspect they do. They are pretty smart guys, those Chinese. But, the CCP are the biggest liars I have ever seen.  And I have only felt that way since watching their responses to the COVID-19 outbreak. They still haven't found a wild animal that carries the disease..." so, let's just blame it on the US military."

They have a problem of domestic underground locations because of the seismic history of the geography. That is why their shale is uneconomic and for such a large plain of river flood zones their oil resources are fairly small. But they do have depleted wells of conventional oil which they can fill up if they haven't disassembled the pipelines for scrap. 

[ceo_energemsier + 1,818]

18 minutes ago, 0R0 said:

I think there should be no response to the Saudi market flooding project. No embargo, no tariff. It is a net benefit for the US to figure out where to store oil that costs less to buy off the market than US production . If we pump it back into the ground, then so much the better to supply the country in the future. It is a gift from Saudi and the ultimate target is more Russia than the shale frackers. They are emptying their domestic and offshore storage in Rotterdam and Egypt. And rushing ships to these markets at a lower price than anything Russia quotes. They have the obvious goal to prevent Russian sales regardless of price. Their target is to deliberately force Russian producers to close the taps first. Something that the US frackers should want as well, since Russian production is the slowest turnaround for switch on and switch off. Particularly Siberian and Arctic oil. Their southern oil fields are much quicker turnaround so I assume those will be shut first. But that depends on which company owns them. 

Remember that the the shale frackers will have their financial and lease costs slashed once they go through bankruptcy restructuring. That will lower their breakevens and consolidate assets with the financially stronger companies. That means BETTER US production economics in the future. 

The US runs on oil. It is a vast sprawling population, that will now expand sprawl indefinitely as dense metro centers turn out to be petri dishes for pandemics, and are already depleting as Millennials mature into being parents riding trucks and SUVs rather than singles piled up in flatshares in downtown metros on buses and subways. We need the world's oil more than anyone else does. So storing cheap underpriced Saudi or Russian crude is precisely the country's best option. It requires no policy but for filling up the existing empty space in the SPR. Otherwise look to the market to fill up the storage. 1 year forward contango allows 41%, 2 year is 55%, 3 year is 63% 4 year is 70% lots of space in the calendar structure to cover transport pipeline and reinjection storage. 

Let the market do its job and we should all be better off for it - eventually.

NOPEC was designed to break sustained high oil prices due to cartel operations curtailing production. 

The Saudis always claimed that if they can be paid in gold then they would open their production to full blast till it is depleted. It was precisely what the US had been pressing OPEC to do for half a century. Surely we should not complain about it when it actually happens. 

 

 

Its not easy to use old or existing wells to store oil by pumping the oil into the well. Geology is a a key factor, you maybe able to use some old depleted oil/gas conventional fields for that purpose but most of the shale fields and wells will be a problem.

Buying "cheap" Russian and Saudi oil is only going to embolden their current arrogance and they will continue the "price war and oil flood"

 

[ceo_energemsier + 1,818]

(Bloomberg) -- Oil was swept up with other risk assets on optimism over a U.S. stimulus package to shore up the coronavirus-battered economy.

Futures advanced 2.8% in New York as House Speaker Nancy Pelosi signaled Congress will reach a deal on a massive spending bill, a day after the Federal Reserve unveiled a sweeping set of economic measures. Those efforts also helped equities rebound, with the Dow Jones Industrial average having its best day since 1933.

All that helped offset fears over a global crude glut. However, those worries are still reflected in the structure of the market, which sank further into contango -- a sign of oversupply where near-term cargoes are cheaper than those for later. Brent’s six-month time spread widened to levels not seen since 2009.

Major trading house Gunvor Group Ltd. estimated that the global crude surplus stood at 14 million to 15 million barrels a day as the coronavirus pandemic obliterates demand, and major producers such as Saudi Arabia and Russia pump more to gain market share.

“The hope for more stimulus is giving a short-term boost,” said Josh Graves, market strategist at RJ O’Brien & Associates LLC. “From a fundamentals standpoint, we’re still looking at two cataclysmic supply and demand shocks. Those need to be addressed before we see any sustained rally.”

American lawmakers haven’t yet reached a deal to bolster the U.S. economy, which has started showing signs of weakness from the fallout over measures to contain the spread of the virus.

A gauge of activity at service providers and manufacturing contracted the most on record on Tuesday. The U.S. Central Bank said Monday it would buy unlimited amounts of Treasury bonds and mortgage-backed securities, and set up programs to ensure credit flows to corporations.

Oil markets have turned bearish during the crisis, with the benchmark for global physical supply at its weakest since 2002 on Monday and gasoline in the U.S. crashing. IHS Markit estimates that global demand in the second quarter will contract by 14 million barrels a day, while Sanford C. Bernstein & Co. forecasts consumption could drop by as much as 20% this half.

“As long as we keep seeing lockdowns, it’s going to fuel the question of how deep does the demand destruction go,” said Ian Nieboer, managing director at RS Energy Group, now part of Enverus. “At the same time, more barrels are hitting the market. The path for recovery is still very uncertain.”

As the Russia-Saudi price war rages on, Group of Seven finance chiefs urged oil-producing nations to support international efforts to stabilize world markets rocked by the coronavirus crisis. The G7’s request follows a range of attempts at mediation that so far have failed to yield results.

Prices:

• West Texas Intermediate gained 65 cents to settle at $24.01 a barrel in New York.
• Brent for May gained 0.4% to settle at $27.15 a barrel.
• U.S. gasoline jumped almost 8% to 44.37 cents a gallon.

Meanwhile, oil refiners across the U.S. are curbing operations amid the dramatic collapse in gasoline demand and prices. OPEC producer Nigeria offered to sell its crude in April at unusually large discounts.

Those discounts are set to force crude into storage, though traders may find they can’t fill tanks quickly enough, Citigroup Inc. analysts wrote in a report. As a result, the oil futures curve is set to weaken further, they said, testing the ability of producers to keep pumping.

Other oil-market news:

• Chevron Corp. became the latest major oil company to take an ax to its budget after halting its $5 billion-a-year share buyback and halving spending in the Permian Basin.
• Two of the world’s biggest oilfield service companies are warning of a bigger shale crash than the one that hit the U.S. and Canada just five years ago.
• Some North American customers of Saudi crude have renominated for less supply for loading in April following a move by state-owned Aramco to slash its freight rebates for buyers.
• Petroleos Mexicanos’s battle for market share on the U.S. Gulf Coast is jump-starting Latin American oil sales, even as refiners reduce operations amid plunging fuel demand and collapsing prices.