Goldman Sachs has predicted that oil demand could fall by 10.5 million barrels per day (bpd) in March and possibly by as much as 18.7 million bpd in April, the Wall Street bank said in a note dated March 25.
“A demand shock of this magnitude will overwhelm any supply response including any potential core organisation of the Petroleum Exporting Countries (OPEC) output freeze or cut,” the investment bank said.
Refiners across the world have been reducing operations as the spread of the coronavirus has led to steep falls in aviation and motor fuel demand.
“The scale of the demand collapse will require a large amount of production to be shut-in, of potential several million barrels per day,” the bank said, adding that such a hit on production would not likely be reversed quickly.
With coronavirus travel bans and lockdowns offsetting hopes a $2 trillion US stimulus package will shore up economic activity.
“While we expect a further sharp sell-off in oil prices in coming weeks, we increasingly see risks that the rebound in prices will be much sharper than our base-case rally back to $40 per barrel Brent by fourth quarter of 2020,” the bank said. Traders and analysts are scrambling to cut their forecasts for oil demand.
Nigeria is looking at reducing its 2020 budget by N1.5 trillion ($4.90 billion) as the global spread of the coronavirus takes a massive toll on its economy.
Roughly 90 per cent of the Nigerian government’s foreign exchange earnings come from sales of oil, prices of which have taken a beating amid lower Chinese demand and a price war between Saudi Arabia and Russia.
Finance Minister, Mrs Zainab Ahmed, said the 2020 budget would have to be cut. The spending plan, which was calculated assuming crude production of 2.18 million barrels a day at a price of $57 per barrel, was passed in December.
Currently, the Nigerian government is considering a crude oil benchmark of $30 per barrel.
COVID–19: Why Government’s Communications Have Not Been Effective —Experts
Despite universal attestation to the existence of Coronavirus and the havoc it can wreck on humanity, if allowed to thrive, quite a sizeable number of Nigerians, especially those at the lower rungs of the socio-economic ladder, would still prefer to treat such claim with a pint of salt… Read full story
Coronavirus: Abba Kyari Confirms Health Status, Says He Is Moving To Lagos For Isolation
The Chief of Staff (CoS) to the President, Mallam Abba Kyari, has admitted that he has tested positive for coronavirus, saying that he was being moved to Lagos for further tests and observation. He has also explained that since he discovered his status last week, he had borne his own treatment to prevent… Read full story
COVID-19: God Proving His Might, Adeboye Says
The General Overseer of the Redeemed Christian Church of God, Pastor Enoch Adejare Adeboye, has revealed that the reasons that countries of the world are experiencing COVID-19 pandemic is as a result of divine setting. He made the submission while speaking at the Sunday Service on the church broadcast, Dove… Read full story
Eight Strains Of Coronavirus Are Circling The World, Scientists Say
At least eight strains of the coronavirus are making their way around the globe, creating a trail of death and disease that scientists around the world are tracking by their genetic footprints… Read full article