• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 2 hours "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 17 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 2 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 17 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 11 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 4 days The Federal Reserve and Money...Aspects which are not widely known
  • 2 days "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 9 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 5 days "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 11 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 13 days Goldman Betting on Cryptocurrencies
  • 16 days Сryptocurrency predictions
European Gas Consumption Is 24% Below The Five-Year Average

European Gas Consumption Is 24% Below The Five-Year Average

Demand destruction is clearly underway…

Gasoline Prices Continue To Plummet In The U.S.

Gasoline Prices Continue To Plummet In The U.S.

After a relentless month’s long…

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