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Crude oil and refined fuel product prices fell significantly on Friday near 13 month lows on increased fears that the coronavirus (COVID-19) will spill over into other countries besides China and reduce global economic growth. Coronavirus confirmed cases recently spiked in Italy, South Korea, and Iran. This caused the Dow Jones to fall dramatically this week down by a 10% correction.
WTI crude oil prices have fallen nearly 16% over the past 5 trading days. Some energy analysts expect the coronavirus quarantine efforts to continue oil demand destruction through Q2 this year. Consultants Facts Global Energy forecast oil demand would grow by only 60,000 barrels per day in 2020, a level it called “practically zero,”
As of 3/01/20, there are now 87,500 confirmed coronavirus cases with a total of 2,987 deaths. However, the World Health Organization (WHO) now thinks that the coronavirus confirmed cases are at or near the peak.
The US Department of Energy reported that it will sell up to 12 million barrels of oil from the SPR in Compliance with the 2015 budget act.
Rystad Energy Forecast that the coronavirus outbreak could cut oil industry investment this year by tens of millions of dollars and delay the delivery of offshore installations currently being built at Asian yards. Its current assessment forecast that the outbreak could result in global production and exploration investment falling a by $30 billion in 2020. It reported that lower oil prices will result in oil and gas companies scaling down their flexible investment budget, especially shale operations in the US, as well as, some offshore production and exploration companies. The virus outbreak could postpone deliveries from offshore platforms and other equipment from yards by at least three to six months, due to shortages of staff or supplies, as well as travel bans.
Société Générale maintained its forecast for Brent crude price to average $56.25 per barrel in 2020. It forecast global oil demand growth of 410,000 bpd in 2020. It also forecast a moderate 670,000 bpd oil supply surplus in the fiscal year 2020. It expects OPEC+ to further cut its output by 600,000 bpd in March, increasing its total commitment to 2.3 million bpd.
The US agriculture Department will make available up to $100 million in grants to expand the infrastructure needed to sell more ethanol, biodiesel and other renewable fuels. Last year the Trump administration, seeking to win over farmers, lifted restrictions on the sale of gasoline containing up to 15% corn-based ethanol, called E15, opening the door to expanded investment.
Energy Products Fall Significantly on Viral Fears
March 2nd, 2020
Crude oil and refined fuel product prices fell significantly on Friday near 13 month lows on increased fears that the coronavirus (COVID-19) will spill over into other countries besides China and reduce global economic growth. Coronavirus confirmed cases recently spiked in Italy, South Korea, and Iran. This caused the Dow Jones to fall dramatically this week down by a 10% correction.
WTI crude oil prices have fallen nearly 16% over the past 5 trading days. Some energy analysts expect the coronavirus quarantine efforts to continue oil demand destruction through Q2 this year. Consultants Facts Global Energy forecast oil demand would grow by only 60,000 barrels per day in 2020, a level it called “practically zero,”
As of 3/01/20, there are now 87,500 confirmed coronavirus cases with a total of 2,987 deaths. However, the World Health Organization (WHO) now thinks that the coronavirus confirmed cases are at or near the peak.
The US Department of Energy reported that it will sell up to 12 million barrels of oil from the SPR in Compliance with the 2015 budget act.
Rystad Energy Forecast that the coronavirus outbreak could cut oil industry investment this year by tens of millions of dollars and delay the delivery of offshore installations currently being built at Asian yards. Its current assessment forecast that the outbreak could result in global production and exploration investment falling a by $30 billion in 2020. It reported that lower oil prices will result in oil and gas companies scaling down their flexible investment budget, especially shale operations in the US, as well as, some offshore production and exploration companies. The virus outbreak could postpone deliveries from offshore platforms and other equipment from yards by at least three to six months, due to shortages of staff or supplies, as well as travel bans.
Société Générale maintained its forecast for Brent crude price to average $56.25 per barrel in 2020. It forecast global oil demand growth of 410,000 bpd in 2020. It also forecast a moderate 670,000 bpd oil supply surplus in the fiscal year 2020. It expects OPEC+ to further cut its output by 600,000 bpd in March, increasing its total commitment to 2.3 million bpd.
The US agriculture Department will make available up to $100 million in grants to expand the infrastructure needed to sell more ethanol, biodiesel and other renewable fuels. Last year the Trump administration, seeking to win over farmers, lifted restrictions on the sale of gasoline containing up to 15% corn-based ethanol, called E15, opening the door to expanded investment.