Saturday, February 29, 2020 /08:00
AM / By Meredith Taylor of Oilprice.com / Header Image
The oil price crash continued on
Friday morning as Brent broke through the $50 mark and stocks experienced the
worst weekly performance since the financial crisis.
Friday, February 28, 2020
The meltdown continues. Brent fell below $50 per barrel during intraday trading
on Friday, and financial markets continued to post sharp losses. Oil is set to
close out the week with the worst loss in four years. For stocks, the losses
are the worst weekly performance since the global financial crisis in 2008.
Whether this is an overreaction to the coronavirus or not is yet to be seen.
market meltdown. The Dow Jones fell by a record number
of points on Thursday, down nearly 1,200. That puts stocks in correction
territory, with the index off about 15 percent in a week. "Obviously it's a
bloodbath," David Bahnsen, chief investment officer of The Bahnsen Group, a
wealth management firm, told the Wall Street Journal. "When you get into a free-fall mode, there's really little
that can be done but wait for some sort of footing to be found." At one point,
the Dow lost 500
points in 45 minutes on Thursday.
at 14-mont low. Brent fell to $52 per barrel on
Thursday, dropping to its lowest level since December 2018. By Friday, Brent
had dipped below $50.
Arabia seeks larger cut. Saudi Arabia is pushing OPEC
to increase its production cut to 1 million barrels per day (mb/d). Just a few
weeks ago, OPEC's Joint Technical Committee recommended additional cuts of just
600,000 bpd. Riyadh's proposal would entail Saudi Arabia taking on the bulk of
the new cuts. To date, Russia has been reluctant to sign on, but the sharp drop
in prices increases pressure on the group.
stocks plunge. Along with the rest of the stock
market, energy shares fell sharply on Thursday, with the worst of the carnage
reserved for drillers that also reported disappointing earnings. Whiting
Petroleum (NYSE: WLL) fell by 25 percent on concerns over
upcoming debt maturities. Continental Resources (NYSE: CLR) fell
by 16 percent on a downbeat outlook. Others fared only slightly better. The
selloff continued for the entire sector on Friday.
withdraws from oil trade groups. BP (NYSE: BP) announced that
it would withdraw from several lobby groups - the American Fuel and
Petrochemical Manufacturers, the Western Energy Alliance and the Western States
Petroleum Association. The announcement comes shortly after the oil major
announced a series of climate initiatives in an attempt to begin transitioning
the company to a lower carbon portfolio.
quits Alpine High. Apache (NYSE: APA) is
pulling the plug on a highly-publicized oil discovery in the Permian basin. In
2016, the company announced a 2-billion-barrel discovery, the largest in a
decade. At the time, Apache said Alpine
High could be worth $8 billion, by conservative estimates. Three and a half
years later, the company took a $3 billion writedown on the project and said it
has "no current plans for future drilling at Alpine High."
emissions fall sharply. Amidst an economic lockdown,
China's CO2 emissions have temporarily fallen by
roughly a quarter.
Oil demand and supply to slow through 2025. A report from
Bank of America Merrill Lynch sees oil demand slowing in the years ahead as EVs
take hold. But it also sees supply growth slowing as U.S. shale slams on the
brakes. The bank sees oil bouncing around between $50 and $70 through 2025.
gas prices sink, little prospect of near-term recovery. A
combination of oversupply, warm weather and, of course, the coronavirus
have depressed gas markets. Inventories are on the rise and may take until next winter
for there to be progress in working them off.
hit by LNG negotiations. Tellurian
(NASDAQ: TELL) saw its share price fall 35 percent during
early trading on Friday, which comes after the company extended the amount of
time India's Petronet LNG Ltd had to
finalized an agreement to buy gas from Tellurian's Driftwood LNG plans in
Louisiana, according to Reuters.
Analysts raised the prospect of a lengthy delay in the final investment
decision for the project. Tellurian is low on cash with maturing debt in
admin could end Chevron waiver in Venezuela. The Trump
administration has repeatedly extended a waiver for Chevron (NYSE:
CVX) to operate in Venezuela despite U.S. sanctions, but
that could soon come to an end. Bloomberg reports that
the administration could let the waiver expire in April as a way of increasing
pressure on the government of Venezuela.
voids 1 million acres of oil and gas leases. A federal
judge voided 1
million acres of oil and gas leases in western states in the U.S., calling the
Trump administration's fast-tracked leasing "arbitrary and capricious."
unveils clean energy plan. Eni (NYSE: E) announced a
plan to cut greenhouse gas emissions by 80 percent, and it also said that its
oil and gas production would peak by 2025 before entering decline.
loss nearly doubles. Mexico's state-owned Pemex posted a
loss in 2019 nearly twice as large as the year before. The company's debt stood
at $105 billion at the end of last year. Meanwhile, oil production fell to
1.693 mb/d, down from 1.723 mb/d in 2018. A credit downgrade is widely
- 3 Rare Metals Every Investor Must Watch At This Critical Time
- Oil Is Now
More Volatile Than Bitcoin - Understanding the Rising Volatility
- WTI Breaks
$50 As Demand Fears Escalate - OIR 250220
- OPECplus Is
In No Rush To Rescue Oil Markets - OIR 210220
Brings An End To The Oil Price Rebound - OIR 180220
Prices Of PMS, AGO, HHK and Cooking Gas - January 2020
Flaring: A Never-Ending Dark Tunnel
- Oil Markets
Bounce Back As Coronavirus Fears Fade
- The Metal
Trump Wants More Than Gold
Concludes Its Joint Technical Committee Meeting: Any Rescue for the Oil
Production Declined By 510,000bpd in January 2020
- Oil Up
Despite Demand Fears - OIR 110220
- Oil Falls
Again As OPECplus Hits Rut
- Nigeria to
Draft Petroleum Industry Bill from Scratch
- The Most
Exciting Oil Plays Of 2020