Weng Rongnan (Ph.D. in Geology, University of Oklahoma, USA, engaged in oil and gas exploration and organic geochemistry research for a long time, former director of the Exploration and Production Research Institute of CNPC, Taiwan) At the beginning of this year (2020), the "COVID-19" (2019 Novel Coronavirus Disease, referred to as Wuhan Pneumonia, New Coronary Pneumonia) is spreading rapidly. In order to control the epidemic, various countries have resorted to anti-epidemic measures such as lockdowns, city closures and restrictions on going out, which have seriously affected economic activities and impacted the oil market.
Global oil demand has plummeted by 25 million fax number list barrels per day from around 100 million barrels per day before the outbreak. The oversupply of oil has caused oil prices to collapse. The price of West Texas Intermediate (WTI) crude oil in the United States has fallen from the range of $50 to $60 per barrel before the epidemic to more than $40 in March, a drop of nearly 30%. In order to save oil prices, members of the Organization of the Petroleum Exporting Countries and allies (OPEC plus) urgently convened a consultation meeting on production cuts. However, the breakdown of negotiations between Saudi Arabia and Russia led to an increase in production instead of reduction, triggering an oil price war.
Oil prices continued to fall below $30, hitting new lows in recent years. In the face of such low oil prices, the Group of Twenty (G20) meeting in April, under the mediation of the United States, finally reached an agreement to reduce production. Since May, OPEC Plus daily production will be reduced by 9.7 million barrels. Only this rare large production cut is still not enough to solve the problem of oversupply, and oil prices continue to fall to about $20 a barrel. On April 20, oil prices plummeted again, and even a negative oil price unprecedented in history.