SandRidge Energy, Inc. (fka SDOCQ)

[LouisDesyjr]

Storage filling up

The problem is that if storage fills up and is completely full, oil and gas prices will crash. While oil demand is still around 92 million barrels per day, the problem is that there is too much supply and pumping going on. Prices will have to crash since the only way to free up storage space for the existing production is to sell off what there is at any price. While there may be a little increase in demand as people do things like fill up their oil tanks of home heating oil, after a while even those also will be full.

Imagine owning some oil wells and having absolutely no place to put the oil? You would have no choice but to stop pumping since you can't just let it run out onto the ground.

That is the situation that we may be nearing within a matter of weeks unless there are cuts in production, which look unlikely with Iran just starting to come online with exports within the last week or so.

Louis J. Desy Jr.