Price War Wipes $196 Billion From Energy Stock Values in a Week - Bloomberg

Price War Wipes $196 Billion From Energy Stock Values in a Week - Bloomberg:

Record lows, trading halts, capitulation and spending cuts made for a wild week in the energy sector after Saudi Arabia and Russia embarked on a war for market share, sending crude and equity prices in a downward spiral.

The S&P 500 energy index never recouped the stunning losses it saw at the beginning of the week, despite the late-day surge in U.S. stocks Friday on optimism for increased coronavirus testing. The sector plunged 24% in its biggest weekly decline since October 2008, outstripping the 8.8% loss in the benchmark and cementing its place as the worst-performing group for the past 5 trading sessions. The group lost about $196 billion in market capitalization this week through Friday’s close, according to data compiled by Bloomberg.

“It’s hard to imagine a world where nothing changes after this,” Spiro Dounis, an analyst at Credit Suisse in New York said in a note to clients, who added that his midstream coverage broke “all the wrong kinds of records” amid the equity and oil rout.

Oil’s Worst Week Since 2008 Tempered By Trump’s Vow to Fill SPR - Bloomberg

Oil’s Worst Week Since 2008 Tempered By Trump’s Vow to Fill SPR - Bloomberg:

Oil posted the biggest weekly plunge since 2008, capping its most dramatic week in recent memory as major producers prepare to drench the market with supply just as the coronavirus crushes demand. But prices jumped following the close, after President Donald Trump said the U.S. would fill the nation’s strategic reserve.

Losses for the week totaled 23% after the collapse of talks between members of the OPEC+ group triggered the biggest crash in a generation. Instead of reaching a deal to cut output to mitigate the fallout from the virus, producers led by Saudi Arabia and Russia embarked on a war for market share and pledged to pump more.

Crude has also been roiled by turmoil across global markets, with investors uncertain if efforts by policy makers worldwide will be enough to tackle the economic impact of the spreading coronavirus. Apart from battering economies who are dependent on energy revenue, oil’s collapse is also hitting U.S. shale producers by forcing them to cut spending and dividends. The threat of lower driving demand sent gasoline futures to their worst week ever.

Crude posts worst week in a decade, hit by coronavirus and price war eruption - Reuters

Crude posts worst week in a decade, hit by coronavirus and price war eruption - Reuters:

On Friday, prices were higher, rebounding after the United States and other nations signaled plans to support weakening economies. But Brent crude LCOc1 dropped 25% on the week, the biggest weekly fall since the 2008 global financial crisis. On Friday, Brent rose 63 cents to settle at $33.85 a barrel.


U.S. West Texas Intermediate (WTI) crude CLc1 futures fell about 23% on the week, their biggest percentage decline since 2008. WTI rose 23 cents to settle at $31.73 a barrel, after earlier gaining to $33.87 a gallon.

Why #SaudiArabia launched an oil price war | FT - YouTube

Why Saudi Arabia launched an oil price war | FT - YouTube:



Oil prices had one of their biggest ever falls after the effective collapse of an agreement between Saudi Arabia-led Opec and Russia. The agreement was designed to support the market against the impact of coronavirus. Senior energy correspondent Anjli Raval explains.

Oil’s Shocking Crash Drags Prices Toward Worst Week Since 2008 - Bloomberg

Oil’s Shocking Crash Drags Prices Toward Worst Week Since 2008 - Bloomberg:

Oil is set to end its most dramatic week in recent memory with the biggest plunge since 2008, as major producers prepare to drench the market with supply just as the coronavirus crushes demand.

While futures fluctuated on Friday, prices are down about 24% this week. The crash was triggered by the collapse of talks between members of the OPEC+ group. Instead of reaching a deal to cut output to mitigate the fallout from the virus, producers led by Saudi Arabia and Russia embarked on a war for market share and pledged to pump more.

Crude has also been roiled by turmoil across global markets, with investors uncertain if efforts by policy makers worldwide will be enough to tackle the economic impact of the spreading corononavirus. Apart from battering economies who are dependent on energy revenue, oil’s collapse is also hitting U.S. shale producers by forcing them to cut spending and dividends.

The schism between Moscow and Riyadh is hardening with Russian oil producers planning to ramp up output next month, and no plans for a detente with Saudi Arabia. The kingdom said earlier in the week that it would boost output by more than 25% in April, while it sends a rush of crude to Europe, Russia’s traditional market.

#UAE News: #AbuDhabi Cuts Oil Prices as Oil War Widens - Bloomberg

UAE News: Abu Dhabi Cuts Oil Prices as Oil War Widens - Bloomberg:

Processing tanks at the Ruwais refinery and petrochemical complex, operated by Abu Dhabi National Oil Co., in Al Ruwais, United Arab Emirates, on May 14, 2018. 

 Photographer: Christophe Viseux/Bloomberg

Abu Dhabi took a cue from Saudi Arabia and cut pricing for its crude as the world’s biggest producers prepare to flood oil markets in a race for market share.

Abu Dhabi National Oil Co. announced forward pricing for its barrels for the first time on Friday because of the “unprecedented market conditions,” the company said in a statement. Crude had its biggest single-day drop in almost three decades earlier this week after talks between OPEC and Russia collapsed, and the coronavirus continues to decimate demand.

Adnoc will sell its flagship Murban grade for a discount of $2.75 a barrel to the Dubai benchmark in April. That’s $4.63 less than the grade’s pricing for this month, which Adnoc issued at the same time.

Abu Dhabi is home to most of the oil deposits in the United Arab Emirates, the third-largest member of the Organization of Petroleum Exporting Countries. Adnoc is Abu Dhabi’s government-run producer.

World stocks rise on spending hopes but bounce fizzles - Reuters

World stocks rise on spending hopes but bounce fizzles - Reuters:

Stocks across the globe bounced back on Friday after historic drops, but hopes of more central bank stimulus and government spending went only so far and the comeback lost steam in a week of pandemic panic-selling across markets.

Volatility is expected to remain high, with sharp moves expected in both directions and across asset classes. The S&P 500 rose as much as 6.1% intraday on Friday and was last up 0.6%.

Stocks rose Friday on hopes of a coordinated stimulus package from world governments in response to the coronavirus pandemic, which threatens to slow down the global economy.

“What we’re headed for is a market that should begin to settle down (with) investors now expecting the government to get the economic plan in place and get it into law,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

#SaudiArabia floods markets with $25 oil as fight with Russia escalates - Reuters

Saudi Arabia floods markets with $25 oil as fight with Russia escalates - Reuters:

Saudi Arabia is flooding markets with oil at prices as low as $25 per barrel, specifically targeting big refiners of Russian oil in Europe and Asia, in an escalation of its fight with Moscow for market share, five trading sources said on Friday.

The sources, from oil majors and refiners which process crude in Europe, said Saudi state oil company Aramco told them it would supply all requested additional volumes in April.

Sources previously told Reuters Saudi Arabia is also seeking to replace Russian crude in Asia with Chinese and Indian buyers. Tanker rates soared as Saudi Arabia chartered dozens of supertankers to take extra oil, including to the United States, where Russian oil is less popular.

Oil prices have halved since the start of the year because demand has been hit by the coronavirus outbreak and after Russia and OPEC failed to reach a new deal on supply cuts.

Oil Crash Is a Double-Edged Sword for LNG With Projects at Risk - Bloomberg

Oil Crash Is a Double-Edged Sword for LNG With Projects at Risk - Bloomberg:

Oil’s rout may have been an unexpected boon for the biggest buyers of liquefied natural gas, but its knock-on effects may come back to bite.

That’s because more than a dozen proposed LNG export projects from the U.S. to Mozambique are at risk of being delayed or scrapped as crude careened to levels that make most of them unprofitable. If fewer of them come to fruition, that would ease a widening supply glut later this decade and potentially lift prices amid breakneck demand growth in Asia.

Almost 20 proposed export plants are vying for a shrinking pool of capital after a record number of terminals reached final investment decisions last year. Even before crude’s drop, developers were under pressure from a slump in global gas prices, milder winter temperatures and demand restraints from the coronavirus.

“With significant downward pressure on spot LNG prices and oil prices, it could be the double-whammy that really starts to make some projects seem uneconomic,” Jeff Moore, an analyst with S&P Global Platts, said in an email. “If oil prices stay low for much of this year, I would imagine it could have a material impact on supply projects looking to reach FID this year.”

Oil, OPEC News: The Pitiful Oil Market the Saudis and Russia Are Fighting Over - Bloomberg

Oil, OPEC News: What Happens to Inventories During Price War? - Bloomberg:

Oil demand growth forecasts have been slashed to their lowest in more than a decade, just as OPEC producers and their allies abandon their four-year-old attempt to limit supply and prop up prices. One of the world’s leading oil forecasting agencies already saw stockpiles soaring this year, even before producers embark on boosting output.

The International Energy Agency, the U.S. Energy Information Administration and OPEC — the Organization of Petroleum Exporting Countries — have taken an axe to forecasts for oil demand this year, cutting year-on-year growth to the lowest levels since the financial crisis of 2008-09. The IEA was the first of the three to predict that the world will use less oil in 2020 than it did in 2019. OPEC is the only one of the three that sees stockpiles being drawn down this year - but that was before its de facto leader, Saudi Arabia, decided to open the taps and flood the world with crude in a price war that has no quick end in sight.

As the Covid-19 virus spreads around the world, demand forecasts have been slashed. The biggest reductions have been made to the first quarter, when the virus is likely to have its most significant impact in Asia. As the disease spreads to Europe and the Americas in the second quarter and its impact on Asia potentially eases, the effect on global oil demand is lessened, although that view may change if governments continue to respond with widespread travel bans like the one imposed by President Donald Trump on flights into the U.S. from Europe.

#Saudi Aramco expected to post profits drop in first results since IPO - Arabianbusiness

Saudi Aramco expected to post profits drop in first results since IPO - Arabianbusiness:

Saudi Aramco is expected to announce a drop in profits as it unveils Monday its first annual results since its listing, as the energy giant grapples with sinking oil prices.

The 2019 financial results follow an initial public offering on the domestic stock exchange in December, which raised a record $29.4 billion from a sale of 1.75 percent of the company.

The results will not reveal the impact of the new coronavirus or the Saudi decision to slash crude prices after OPEC and its allies failed to reach a deal on production cuts, sending global markets into a tailspin this week.

In April 2019, the secretive company opened up its accounts to ratings agencies for the first time, revealing a net profit of $111.1 billion for the previous year.

Oil market set for record surplus amid virus-led demand slump: Goldman Sachs - Reuters

Oil market set for record surplus amid virus-led demand slump: Goldman Sachs - Reuters:

Goldman Sachs said the oil market could see a record surplus of about 6 million barrels per day by April, considering a bigger- than-expected surge in low-cost output, while a slump in demand was “increasingly broad” triggered by the coronavirus outbreak.

Brent was set for its biggest weekly loss since 2008 as oil prices plummeted this week after top producer Saudi Arabia slashed its selling prices amid a price war with Russia and pledged to unleash more supply onto a market already reeling from falling demand due to the virus.

“The high-cost producer response at our second quarter 2020 $30/bbl Brent forecast will not be sufficiently fast to offset the record large inventory builds set to occur in coming months,” the Wall Street bank said in a note dated March. 12.

The jump in inventories could also force some inland high-cost producers to shut production, since storage logistics may be stretched, the bank’s analysts added.

Oil rises over 3% but set for biggest weekly thumping since 2008 - Reuters

Oil rises over 3% but set for biggest weekly thumping since 2008 - Reuters:

Oil prices were set for their worst weekly drubbing since the 2008 financial crisis, despite rising over 3% on Friday, as investors fretted over evaporating demand from the coronavirus pandemic and a production ramp-up by top producers.

Brent crude LCOc1 was up $1.12, or 3.4%, at $34.33 a barrel by 0728 GMT after falling more than 7% on Thursday. For the week, Brent is set to fall around 24%, the biggest weekly decline since December 2008, when it fell nearly 26%.

U.S. West Texas Intermediate (WTI) crude CLc1 rose $1.17 cents, or 3.7%, to $32.66 per barrel after falling more than $1 earlier in the session. WTI is set to drop nearly 21% this week, also the most since the height of the financial crisis.

“It’s been a very rough week and so it’s not impossible people are locking in ahead of the weekend,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.