Oil falls for third day as coronavirus travel bans escalate

WTI

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So much let's turn to oil now crude remains below thirty dollars a barrel and WTI briefly traded below its lowest settlement price since two thousand three earlier that's as the corona virus pandemic threatens to bring the global economy to a standstill making things worse is Saudi Arabia boosting exports by pumping more than ten million barrels a day in the coming months let's get more details with our energy reporter Dan Martel in Singapore it's it's been a wild ride in the crude market down how much further it might we go it seems like it at this moment in time there isn't a lot in terms of positive catalysts for oil prices now chasing it intact we still have a lot lower to go before we start to keep floors if Saudi Arabia and Russia decide to keep producing like they are right now that means we're going to have to go low enough to make a filling up basically every storage tank in tanker in the world profitable and then even lower to the point where it's now possible to produce oil from wells are already been drilled already that means what is the need to go down to twenty dollars a barrel maybe even lower to the teens people even possibly into the single digits so without any sort of upcoming possibility of yeah Saudi Arabia and Russia making nice it doesn't look like there's a lot of room to go up mmhm then in terms of the impact I mean you mentioned some of the potential price points at Missouri says the crude price could go negative wants to storage tanks are full standard chartered is talking about dipping into the twenties in below that potentially but what about the time line here I mean how long would it take to clear the amount of Volvo over supply I mean if they do agree the Russians and the Saudis and OPEC plus if they agree quickly can they fix this quickly well the other problem is we're dealing here not only with a supply shock and Russian Saudi Arabia but also with this you know once a generation demand shot because the coronavirus so in the near term even if there is some sort of agreement you have this huge reduction in demand it started back up again in China but it's just gonna drop in Italy and Spain and the U. S. as these sort of self isolation measures take hold the rest of the world so you know for the next order you know first quarters basically went out second quarter is already looking pretty bad and demanding also we're looking easily into the second half of the year and so any kind of price recovery but possibly you know the the upside is you look out on a much longer vision after twenty twenty one and beyond you know a lot of production is gonna get shut off a lot of capital is gonna be canceled and so prices are gonna have to rise higher than to be able to to reprint on new production future get down I wanted to ask you exactly about this point in the relationship between U. S. shale and capital markets it's something that I know you follow the price dropping crude alone is painful enough for the oil patch over in the U. S. but now you have the strains in credit markets as well how bad is it going to get for you I shall well it's gonna get really bad here she was built I just hundreds of small companies that access cheap cheap credit right back after this initial crisis and they were able to go out drill a lot and you basically just drill without having to produce a lot of free cash flow to pay it off for a while that's you know basically hitting the fan right now and those companies are you know over day and they don't have a lot of cash coming in to be able to pay that off you can see a lot of bankruptcies especially stress continues on for the next couple months but in the long term you know the the actual geology the land acreage is there and good companies are going to know it's there so you're gonna see some consolidation bigger companies clever survived this will be able to pick up some cheap scraps and be able to producing

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