Coronavirus: OPEC-Russia consider emergency meeting to cut supply in response to anemic Chinese demand
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Crude oil prices continued to fall Monday, following news that the coronavirus outbreak continues to spread and China’s economy continues to falter. An influential news report from Bloomberg suggested Chinese oil demand is plunging.
“One of the things that hit the market this morning was the report that Chinese demand may be down as much as three million barrels of oil per day,” Ellen Wald, energy analyst and president of Transversal Consulting, said.
If true, that would compromise a huge and sudden dropoff in Chinese oil demand. As crude prices fell — to their lowest levels in a year — word came that the oil supply organization known as OPEC Plus would hold an emergency meeting as early as next week and cut supply by as much one million barrels per day. The OPEC Plus group includes Saudi Arabia and Russia, two of the world’s largest oil producers.
“Normally you would hear news of a million barrel per day cut and oil prices would go up,” Wald said.
But prices continued down. Nervous traders are selling oil contracts first and asking questions later, said Mikkal Herberg, energy research director at the National Bureau of Asian Research.
“Chinese oil demand statistics are a little fuzzy,” Herberg said, “much more opaque than, say, the U.S. market or the European. Where this virus is evolving so quickly, we’re all, in a lot of ways, in the dark.”
When the official data do come out, markets may calm down a bit, yet even then there will be a big question on traders’ minds: how long the Chinese slowdown will last.
“I think it’s that part which is right now fraying the most nerves on the market,” Roger Diwan, energy analyst and vice president of IHS Markit, said. “We don’t know if it’s another week, or another four weeks or six weeks.”
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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