COVID-19 Concerns Are Reaching New Levels
March 12, 2020
Today the news is again bad as the coronavirus concerns are reaching new levels. As organization cancel meetings, the NCAA says games will be played with no fans, company’s ban travel for employees unless absolutely critical, and some university go to online classes only these actions have caused another round of selloffs in all markets.
Also, yesterday the World Health Organization did declare the coronavirus a pandemic.
The CME made the announcement that they will close the CME Group trading floor because of the crisis. Chicago also cancelled two of Their St Patrick Day parades.
President Trump last night in an address to the nations banned travel from Europe to the US for 30 days. Both WTI crude oil and Brent crude oil traded $2 lower as the President made the comments. This speech was to assure that always ok but had an opposite impact.
The DOE report called crude oil up 7.66 million barrels and the crude stocks at Cushing, Ok were up 704,000 barrels. Gasoline stocks were down 5.05 million barrels and distillates were down 6.40 million barrels.
Propane stocks were down 2.920 million barrels. Midwest stocks were down 1.174 million barrels and the Gulf Coast stocks were down 1.1812 million barrels.
In its Short Term Energy Outlook, the EIA cut its 2020 world oil demand growth forecast by 660,000 bpd to 370,000 bpd, while it raised its oil demand growth estimated for 2021 by 210,000 bpd to 1.73 million bpd.
Saudi Arabia is taking extreme actions as it appears, they will not take part in an OPEC+ technical committee conference call supposed to happen to next week. This give the appearance the not only are they done with Russia they might also be done with OPEC. Their new mantra may be, produce, produce, produce as they look to flood the market and punish producers that have a higher break even cost.
Let’s all hope that at some point in time all this settles down and calmed actions begin again. Market volatility is high so again be careful as price as changing rapidly.