• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 2 days Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 8 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 2 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 9 hours "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 13 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 8 hours An Indian Opinion on What is Going on in China
  • 1 day Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 14 hours Can Technology Keep Coal Plants Alive and Well?
  • 2 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 3 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 6 hours U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 11 hours Storage of gas cylinders
  • 4 days Nord Stream - US/German consultations
U.S. Oil And Gas Dealmaking Slows Down In Q3

U.S. Oil And Gas Dealmaking Slows Down In Q3

Mergers and acquisitions in the…

IEA: Energy Crisis Threatens Economic Recovery

IEA: Energy Crisis Threatens Economic Recovery

The energy crisis that has…

Turkey Is Suffering As Natural Gas Prices Soar

Turkey Is Suffering As Natural Gas Prices Soar

Turkey has found itself in…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Goldman: China Coronavirus Could Push Oil Down By $3

The outbreak of a coronavirus in China that is now an international threat could cut oil demand by 260,000 bpd, which would translate into a price drop of almost $3 per barrel, Goldman Sachs has said.

Most of the demand loss will come from jet fuel as the risk of disease discourages travelers from getting on a plane, according to the investment bank, whose analysts qualified the outbreak’s effect on oil prices as modest, Bloomberg reports.

Coronaviruses are common among animals but some of them can jump species, which is what happened with the SARS virus, to which the new one is related. Once it does jump species, the virus can be passed from human to human. Since the outbreak, hundreds have been infected and health authorities around the world are on red alert for more outbreaks.

The effect of the disease on oil prices is likely to be limited regionally, if the SARS epidemic is any indication. At the time, Bloomberg recalls, Asian airlines registered an 8-percent decline in annual traffic, according to data from the International Air Transport Association, but carriers elsewhere were much less affected.

So, while the actual effect on demand for jet fuel and, related to it, crude oil, would be limited, it is the uncertainty about demand prospects that may drive prices down.

“While an OPEC supply response could limit the fundamental impact from such a demand shock, the initial uncertainty on the potential scope of the epidemic could lead to a larger price sell-off than fundamentals suggest,” Goldman’s Damian Courvalin and Callum Bruce wrote in a note.

Oil prices were already trending lower when Bloomberg reported the news, pressured by an Energy Information Administration forecast that U.S. shale production is set for another monthly increase next month, to reach a total 9.2 million barrels daily.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on January 22 2020 said:
    Goldman Sachs is moving to the realm of fantasy by suggesting that a loss of oil demand by 260,000 barrels a day (b/d) resulting from the coronavirus in China could cut oil prices by $3 a barrel.

    Let us make a simple calculation. If the world is currently consuming 100.1 million barrels a day (mbd) at an oil price of $64 a barrel, reducing the global demand by 260,000 b/d would reduce the oil price at most by $0.17 (17 cents) to $63.83.

    If the loss of 5.7 mbd from Saudi oil production hardly caused oil prices to drop, how could a loss of 260,000 b/d translate into a price drop of $3?

    Doesn’t Goldman Sacks and the authoress of this article have something better to do or write about than coming up with such stupid ideas?

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Mamdouh Salameh on January 22 2020 said:
    (These are my amended comments)

    Goldman Sachs are moving to the realm of fantasy by suggesting that a loss of oil demand by 260,000 barrels a day (b/d) resulting from the coronavirus in China could cut oil prices by $3 a barrel.

    Let us make a simple calculation. If the world is currently consuming 11.1 million barrels a day (mbd) at an oil price of $64 a barrel. Reducing the global demand by 260,000 b/d would reduce the oil price by $0.17 (17 cents) to $63.83.

    If the loss of 5.7 mbd from Saudi oil production hardly caused oil prices to rise, how could a loss of 260,000 b/d translate into a price drop of $3?

    Doesn’t Goldman Sacks and the authoress of this article have something better to do or write about than coming up with such stupid ideas?

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News