Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Other damage from pandemic

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Tornado damage. Image courtesy of
Adobe Stock.

Warnings are surfacing about the damage from the stay-at-home orders.  There are mental health repercussions from isolation.  There are also negative health implications from rapidly dropping income and disappearing wealth, such as missed medical screening and delayed or skipped treatment.

4/9/20 – Wall Street Journal – Coronavirus Pandemic Takes Toll On Mental Health – Article describes how the forced isolation and disruptions are starting to cause distress in terms of mental health. There will be a severe Ripple effect from the stay-at-home orders and shutting down the economy.

Keep this in mind for your clients, your staff, and your family.

Keep this in mind for yourself as well.

 

The price war initiated by Saudi Arabia creates a supply side glut of oil. The pandemic creates a demand side glut. I can’t even imagine the impact on the national budget of either Saudi Arabia or Russia from collapsing oil prices.

4/9/20 – Wall Street Journal – Saudi Arabia, Russia Bury Oil Differences, Agree on Big Oil Output Cuts – Previously Saudi Arabia announced plans to increase production from around 9M or 10M bopd to 12M bopd. In order to take market share from Russia and hurt US shale they would flood the market.

Now the Saudis and Russians, along with the other OPEC producers, will drop production combined 10M bopd in May and June. They will then adjust to a combined 6M bopd cut until 4/22.

Saudi Arabia will cut 3.3M bopd off its 12M production level. Russia will cut 2M bopd from its 10.4M production.

4/9/20 – Williston Herald – Mineral owners, state brace for idled oil wells – the collapse of oil prices can be seen in the drop of West Texas Intermediate from over $60 a barrel three months ago to $20 a barrel lately. This will make many wells, particularly older ones who have low production, uneconomical to produce. Expectations in the state (for the state regulator, politicians, and landlord) are many wells will be shut in, meaning production will be placed on hold until prices rise. State regulations outline a procedure to do that without considering the lease being considered terminated or the well abandoned.

Written by Jim Ulvog

April 11, 2020, 8:13 am at 8:13 am

Posted in Other stuff, Pondering

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