https://www.wsj.com/articles/saudis-mull-drastic-oil-cuts-in-response-to-coronavirus-11580728630
The prospect of canceled flights, closed international borders, locked-down cities and idled factories in China, which is the world’s biggest oil importer, have rattled financial markets in recent sessions, sparking swings in stocks, bonds and commodities around the world. Many investors remain braced for greater volatility ahead.
The magnitude of the concern is such that Saudi Arabia’s push for further production cuts among members of the Organization of the Petroleum Exporting Countries failed to buoy oil prices on Monday.
Though prices briefly ticked higher after The Wall Street Journal reported that Saudi Arabia was advocating a short-term curtailment to combat declining demand related to the outbreak of the virus, they quickly resumed their fall.
Global and U.S. prices finished Monday in bear-market territory, generally defined as a 20% decline from a recent peak. The fall marked a rapid reversal from three weeks ago, when escalating tensions in the Middle East drove international prices above $70 a barrel.
Tonight's API report and the EIA report are going to be very interesting. It's not hard to find stories of ships containing oil backing up in Chinese ports.
You can't restrict travel from around the world, shut down roughly 80 million people and neighboring countries closing their borders and not expect a big slow down in demand.
The OPEC is floating a 500k temporary reduction is a joke. If demand is down just 2 mbbls a day for a month, it will take 4 months to undo 1 month of damage.
Good points Jim!
I try.