The Impact of Covid-29 on Energy Markets

We all know that Covid-19 has impacted the world greatly. Not only is it harming people as a highly contagious virus, it is also having a significant on the world's economy. In an unprecedented time, nearly the entire human population is being asked to stay home to mitigate the spread of this disease and it is sending ripples across the economy. Now it is reaching the most fundamental markets of our world, one of which being the energy field.

Oil Market

The global oil demand is expected to decline in 2020 as the impact of Coronavirus spread around the world according to MoneyPug, a site used to compare energy suppliers. It is restricting travel and effecting broader economic activity. According to the International Energy Agency's latest oil forecast, the situation remains unstable that creates another level of uncertainty. No one knows what the full impact will be. A lot of this comes from the drop in Chinese oil consumption but the major travel disruptions to travel and trade.

The IEA had global oil demand at 99.9 million barrels a day in 2020. Now it is down 90,000 barrels a day from 2019. They predicted oil demand would grow by 825,000 barrels a day. The short-term outlook for the oil market will depend on how fast governments contain the outbreak. Regulators have two scenarios for how this could go. There is a negative case scenario, in which the oil market falls by 730,000 barrels a day and an optimistic scenario where the oil market emerges and grows 480,000 barrels a day.

Gas Market

The demand of Chinese industrial gas remains weak. Natural gas was down by almost 25 percent for the year, according to the Chongqing Gas and petroleum Exchange. This data was released this week as the impact...