Friday, February 14, 2020

Corona Virus Trickle Down

Economists have been predicting how the corona virus will eventually affect global manufacturing and I got the first indication of that this morning.

A friend who is the offshore support engineer for a major oil company has been involved in planning a turn around for months. A turn around is a period of major maintenance when the unit is shut down and work goes on 24/7 until complete. They are planned out in detail and almost never postponed. However, today he heard that the turn around currently being planned was being pushed back.

It seems that some valve body forgings that were being made in China will not be available because manufacturing was shut down because of the corona virus. This is the first of what will be a chain of trickle down events for the oil industry. He thinks it will next affect the drilling program which will result in a decrease of production over this year. Lower production will mean an increase in oil prices.

On the positive side, Cameron Valve is running 24 hours a day to meet demand and there is a surge of new pickup trucks in town.

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