Coronavirus – Oil prices could fall below $10 a barrel

Oil prices have been hammered as the coronavirus has led to evaporating demand. With no planes in the sky and few cars on the road, demand has flatlined and marginal oil producers are starting to fail. Some have pinned their hopes on a supply-side intervention, arguing that if large producers like Saudi Arabia and Russia cut their production, oil prices may find a floor. But in this episode, featuring content from the Bloomberg P&L podcast, we discuss why oil may yet fall to historic lows. We also look at potential opportunities in the stock market and ask just how painful the coronavirus-induced global economic hit is likely to be. – Felicity Duncan.Oil prices have fallen steadily over the last month on a combination of supply and demand shocks. The Saudis launched a price war in March after failing to persuade the Russians to join them in a production cut. As supply swamped the market prices began to fall. At the same moment, demand was plunging on the back of the growing coronavirus pandemic. As the virus spread, travel and trade collapsed and today, oil demand has virtually flatlined. This perfect storm has pushed prices down..___STEADY_PAYWALL___.Some hope that prices can be resuscitated by production cuts, but this is easier said than done. The US government has no ability to unilaterally cut production – America's production will fall naturally as unprofitable companies fail. And even if the Saudis and Russians agree on cuts, it's not going to be enough to shore up prices as demand continues to crater..Normally, low oil prices are good news, but as the global economy has come to an abrupt and painful halt, even low oil prices couldn't get consumers out and spending. Indeed, consumers are – in most countries – not allowed to go out and spend. As we wait to turn the tide on the coronavirus outbreak, we are simultaneously bracing for a wave of economic pain. And the evidence suggests that this is likely to be a wave unlike any other.

Coronavirus – Oil prices could fall below $10 a barrel

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