THE WIDER ANGLE
It’s been a price meltdown that looks set only to worsen for the oil industry as Covid-19 pandemic slams demand. On Monday, the price of West Text Intermediate crude slid below $20 a barrel before clawing back slightly. International benchmark Brent Crude was still hanging in there at $22.76. Global oil giants now believe prices could plunge another 20-25 per cent as demand keeps falling amid lockdowns worldwide aimed at containing the highly contagious coronavirus.
It’s hard to believe oil was $65 a barrel when we entered the new decade just three months ago, climbing back to $70 days later. The Chinese ushered in this period of gut-wrenching change for the oil sector January 23 when it closed roads leading into Hubei province. By end-January, the world began comprehending the grim news emerging from China and it all began to unspool for the industry. Oil slipped below $60 and then went into precipitous free-fall.
In the meantime, there’s been the side-show of the battle between Saudi Arabia and Russia about production levels which has unmoored the sector further. On the surface, it’s appeared Saudi Arabia and Russia, which struck a deal back in 2016 to limit output and keep prices around $70, had fallen out. Many Americans, though, see a conspiracy afoot between their erstwhile Saudi buddies and Russia to reduce prices to levels that would wipe out the US shale industry.
Bu hikaye The Hindu Business Line dergisinin April 01, 2020 sayısından alınmıştır.
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Bu hikaye The Hindu Business Line dergisinin April 01, 2020 sayısından alınmıştır.
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