• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 5 hours Which producers will shut in first?
  • 8 hours The Most Annoying Person You Have Encountered During Lockdown
  • 1 hour Its going to be an oil bloodbath
  • 1 day We are witnesses to the end of the petroleum age
  • 5 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 24 mins How to Create a Pandemic
  • 7 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 7 hours Saudi Arabia Can't Endure $30 Oil For Long
  • 14 hours Wastewater Infrastructure Needs
  • 3 hours KSA taking Missiles from ?
  • 1 day A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 1 day >>The falling of the Persian Gulf oil empires is near <<
Alt Text

Iran Is Preparing For An Oil Export Boom

Iran is gearing up to…

Alt Text

Oil Prices Retreat After Massive Rally

After a panic-driven bloodbath on…

Alt Text

Oil Prices Could Fall Another 20%

Oil prices have tumbled as…

Osama Rizvi

Osama Rizvi

Osama is a business graduate and a student of international relations. Currently working as freelance journalist, covering commodities and geopolitics.Osama is a regular contributor to a variety…

More Info

Premium Content

Bearish Sentiment Will Dominate Oil Markets Through 2020

We are less than two months into the new decade and we’ve already seen multiple major oil market events. The first was the killing of Qasim Soleimani, the commander of IRGC’s elite group the Quds. The assassination caused oil prices to spike as talk of a regional and global retaliation from Iran ignited fears of a major supply disruption. Then oil prices received another boost as Phase One of the trade deal between China and the U.S. was signed in what observers hoped would mark the beginning of the end of the trade war. But these bullish drivers couldn’t keep oil prices from falling when the Novel Coronavirus (nCoV) caused the worst oil demand shock since 2008. Now, the trajectory of not only oil prices but also the trade war may have been irreversibly altered by this new epidemic.

The latest figures show that fatalities from Coronavirus (1,118 at the time of writing) have surpassed SARS (774). Oil prices are down more than 20 percent from their peak in January 2020. China’s oil demand has fallen by 20 percent (or 3 mbpd) and independent refiners have reduced their consumption by 30 to 50 percent. It is important to note here that under the Phase One agreement China, to fulfill its promise of buying $200 billion of goods and services from the U.S., needs to purchase about $52 billion of energy products over two years - buying at least $27 bn in 2020.

Related: Chevron Ramps Up Oil Production In Venezuela

China’s current quarter GDP forecasts aren’t promising and once the review, which the U.S. administration will carry out later this year is done, things could well start to fall apart in the trade deal due to the snapback provision that is included.

OPEC appears eager to play its part in pushing oil prices higher but Russia still isn’t convinced about higher production cuts. What seems clear is that OPEC will not be making any decisions until its March meeting.

While the reaction to Coronavirus might be subject to sensationalism and this precipitous fall in prices may be temporary; the overall sentiment vis a vis oil prices has shifted towards very bearish territory. Even if everything returns back to normal it will take few months for the markets to recuperate.

With oil demand being hit hard; the likelihood of China fulfilling its commitment to the Phase One trade deal with the U.S. is very low. With that in mind, it seems likely that bears will rule oil markets for the rest of 2020.

By Osama Rizvi for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment
  • S Bryant on February 12 2020 said:
    "To put it in context, China imported 14 million barrels of oil in November 2018 - its highest ever. Assuming that China buys a similar amount for 12 months it would yield only $9 to $10 billion in revenue, meaning China would have to double its imports from the US in order to reach the above target."

    Your math is way off, China currently uses 13.5mm bbl of oil per day, not per month. I don't know their imports daily but they could easily cover it via buying more US oil.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News