The great crash of 1929, the twin oil shocks of the 1970s and the global financial crisis do not come close/Bloombergby Bloomberg
Oil has slumped to a 17-year low as coronavirus epidemic lockdowns spill through the world’s largest economies, leaving the market overwhelmed by cratering demand and a ballooning surplus of crude.
Physical oil markets are struggling to store fuel, hit by the COVID-19 epidemic restrictions eroding demand and a damaging war for market share between Saudi Arabia and Russia that has prices on track for the worst quarter on record.
Saudi Arabia said that it had not had any contact with Russia about production curbs or enlarging the OPEC+ alliance of producers. Similarly, Russia also doubled down, with Deputy Energy Minister Pavel Sorokin saying oil at $25 a barrel is unpleasant, but not a catastrophe for the country’s producers.
OPEC nations are not giving support to a request from the group’s president for emergency consultations over tanking prices. Algeria, which holds the group’s rotating presidency, has urged the secretariat to convene a panel but the call has failed to gather the majority backing necessary to go ahead.
The world normally uses 100 million barrels of oil day, but forecasters predict as much as a quarter of that has disappeared in just a few weeks. The great crash of 1929, the twin oil shocks of the 1970s and the global financial crisis do not come close.
According to the International Energy Administration, global oil demand is in freefall and consumption may decline by as much as 20 million barrels a day.