Tuesday, 14 July, 2020

Oil prices could drop to $10 amid coronavirus outbreak

COVID-19: Oil majors slash 2020 spending by 18% Oil prices slip as US stimulus vote delayed
Ginger Lawrence | 27 March, 2020, 02:57

Refiners across the world have been reducing operations as the spread of the coronavirus has led to steep falls in aviation and motor fuel demand.

Oil prices slipped back in Asian trade on Thursday, as a Senate vote on a massive stimulus package to help the coronavirus-ravaged U.S. economy was delayed.

U.S. crude inventories rose by 1.6 million barrels last week, the U.S. Energy Information Administration said on Wednesday, marking the ninth straight week of increases. Overall fuel demand fell by almost 2.1 million bpd.

On the Multi Commodity Exchange, crude oil for delivery in April traded higher by Rs 103, or 5.5 per cent, to Rs 1,976 per barrel in 27,659 lots.

With lockdowns in many countries, investors expect that oil demand will contract by more than 10 million barrels per day.

The data showed gasoline inventories fell by 1.5 million barrels, more than twice the expected drop, while distillate stockpiles were lower by about 680,000 barrels, compared with an expected drop of 1.9 million barrels.

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Homegrown OTT platforms including Disney's Hotstar, Times Internet's MX Player and Zee5 will also be working to implement similar measures, TechCrunch reported.

A combination of faltering demand resulting from the coronavirus outbreak and a price war that has seen a rise in production had already raised fears that the industry was entering its worst crisis in hundred years.

The U.S. energy sector is slashing capital spending and jobs as business activity plunged and the outlook has turned "extremely pessimistic" amid the coronavirus pandemic, a survey by the Dallas Federal Reserve Bank of oil and gas companies showed on Wednesday.

Equities resumed their slide today as a historic $2 trillion US fiscal stimulus deal failed to offset worries about a looming recession caused by the coronavirus spread.

At the same time, the collapse of a supply-cut pact between the Organization of the Petroleum Exporting Countries and other producers led by Russian Federation, known as OPEC+, is set to boost oil supply, with Saudi Arabia planning to ship more than 10 million bpd from May. Coronavirus-related measures have dealt such a major blow to oil demand in the short-term that the damage can not be offset by any realistic production cuts.

The world does not need all this oil.