Oil companies may be able to solve supply, but what about demand?
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ExxonMobil, Chevron and Royal Dutch Shell will report earnings this week at a tumultuous time in global economics. Energy stocks were among the worst performers in the U.S. markets pullback at the beginning of this week.
“There’s alternate sources of oil supply in the market but no alternate sources of demand growth,” said Jim Burkhard, head of IHS Markit’s crude oil research.
He said Libyan production has fallen by about a million barrels a day because of conflict there. But U.S. oil production and other sources can make up for that lack of supply.
The biggest thing affecting demand is the coronavirus.
“In the last week and a half, the market has been almost completely taken over by the fears of coronavirus and its impact on demand as well as global economic growth,” said Greg Priddy, director of global energy at the geopolitical intelligence firm Stratfor.
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