RE: Bonkers8 Mar 2020 12:32
Pretty negative article, but does include some less negative comments:
... Bad as they are, things may not be quite as bad as some fear. Don’t expect the full volume of OPEC+ cuts to return immediately and swamp the market. Most members are already pumping at, or close to, capacity. Aside from Saudi Arabia, which could add more than 1 million barrels very quickly, the only other countries with the ability to boost output by more than 100,000 barrels a day are the United Arab Emirates and Russia...
One reason for refusing to play ball may be disagreement over how best to deal with a sudden sharp, but temporary, drop in oil demand. By allowing oil prices to fall, the Russians may be hoping to spur demand. It’s difficult to see that having much impact on consumption, though, when factories are closed, airlines are slashing flights and roads are emptying. Cheap oil won’t ease fears of the Covid-19 virus.
But it may encourage countries like China and India to build up their strategic stockpiles. Both are creating buffers along similar lines to the U.S. Strategic Petroleum Reserve to protect themselves from any future supply disruptions. China already seems to be pouring vast amounts of crude into storage tanks and underground caverns...
And amid the collapse in its oil consumption, China has emerged as the biggest buyer of crude from the Kurdish region of Iraq. It took four out of every 10 barrels shipped last month after buying nothing from the region as recently as October...
https://www.bloomberg.com/opinion/articles/2020-03-08/opec-s-epic-fail-will-hurt-all-oil-producers-even-russia?srnd=premium-europe
Sign In
Follow the stocks
