RE:Oil demand westcanpride wrote: Owing to the unprecedented stoppage of Chinese economic activity in February and the spread of the coronavirus disease 2019 (COVID-19) outside of China, we estimate that world oil demand in first quarter 2020 will be 3.8 million barrels per day (MMbpd) lower than a year earlier, the note stated. Now couple this with the impending oil demand reduction in the United States (probably a 10% haircut is reasonable... so 2million/day), and we could be looking at a scenario where the world is only consuming 94 million barrels in April vs 100million barrels being produced. Additionally, Saudi has indicated they are going to pump an extra 3million barrels per day. So really, its entirely possible we could be in a short term position where the world will have an extra 10million barrels floating around per day. Oil undoubtedly will crash below $20. If I'm CGX, they need to secure any realistic JV deal now. Billion dollar oil companies are literally slashing budgets and dividends hard just to stay afloat (Apache a great example). Management, if they couldnt secure a JV prior to all this when everything was still good, good luck now. Let's see what next couple weeks bring... I think its just the beginning in north america if both china and italy are case studies of how best to defeat this virus.
I would think that securing a deal in the short-term is unlikely now... wouldn't majors be putting the brakes on things until the dust settles ... whatever timeline that may be