Oil prices slid 10% on Monday as the acceleration in coronavirus cases worldwide, which is bringing travel and business to a standstill, further dents global demand for crude.
Oil punters have been watching unfolding developments in the energy space with bated breath after Saudi Arabia made good on its promise to ramp up production to 12 million bpd, and Russia indicated plans to refrain from further production hikes saying such a move is unprofitable. The declarations have come hot on the heels of a flurry of U.S.-driven diplomacy, with Trump talking to both Saudi and Russian leaders, though the former OPEC+ allies have no interest in speaking to each other, as per the Kremlin.
Any agreements to cut supply by either party at this juncture are, however, likely to be a case of too little too late, with trading house Vitol projecting global demand to fall by as many as 30 million bpd in April amid a crippling global pandemic.
Not surprisingly, Trump has tried to paint the desperate situation in a more positive light:
“People are going to be paying 99 cents for a gallon of gasoline,” he has said. “It’s incredible in a lot of ways. It’s going to help the airlines.”
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