Oil, gas and mining

[Global Insight] Why are stocks, oil prices continuing to crash?

코로나•유가전쟁 쇼크 덮쳤다, 세계증시•유가 대폭락

Let’s begin an in-depth discussion with experts from around the world.
Oil prices have fallen sharply for four consecutive weeks now,… slumping by more than 60 percent since the turn of 2020.
As the coronavirus pandemic continues to severely disrupt business, travel and daily life, demand for crude has been plunging,… and major producers like Russia and Saudi Arabia haven’t helped the situation… by launching an intense price war.
This is stirring even more volatility in global stock markets as the world economy reels from the coronavirus pandemic.
It’s a time of uncertainty but to provide us with a better sense of what might lie ahead,…
We’re joined by Dr. Kang WU, Head of Analytics, Asia at S&P Global Platts, and Tony NASH, CEO and Founder of Complete Intelligence.
Let’s first talk about the losses seen on Wall Street on Monday. Overnight, here in East Asia.
Dr. Wu, starting with you: U.S. stocks ended in the red, after a two trillion dollar coronavirus support package failed to pass the Senate for the second time. And stocks have been extremely volatile in recent weeks despite the Federal Reserve having cut its interest rates twice this month and rolling out other never-seen-before measures. Why have these moves failed to reassure investors and are you expecting more blood on the markets?
Oil prices have also been getting battered day after day, due to lower demand and this oil price war between Saudi Arabia and Russia.
Mr. Nash, Moscow started it by refusing to agree to cut its oil production. It’s a dangerous game of chicken so what are they aiming to gain from this brinksmanship?
– Dr. Wu, you were in charge of research in global energy markets in Riyadh. What do you think MPS’s strategy is. Can either country afford this war and who do you think will blink first?
Dr. Wu: With the impact of COVID-19 on markets and economies around the world,… what dangers lurk around the corner if this oil price war rages on for a prolonged period of time? Is it a potential nail in the coffin for many oil companies who were already struggling to turn a profit when oil was 40 dollars a barrel… let alone 20 dollars?
Mr. Nash: Some say the motivation behind this price war is to hurt U.S. shale gas producers? Do you agree and will it work? Can the US Shale industry complex survive a prolonged stretch with oil basically being given away?
– How should the U.S. government react to this?
Dr. Wu: OPEC’s current production cut deal expires at the end of the month. Do you see prices dropping even further after that? (and if so, how would it affect broader financial markets?)
That’s all we have time for. Thank you very much for joining the program today Dr. Kang WU, Head of Analytics, Asia at S&P Global Platts, and Tony NASH, CEO and Founder of Complete Intelligence.

#Global #economy #coronavirus

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