Despite the flippant title, for many oil traders, and even more so oil producers, the situation in the oil market is fairly serious.
The bigger, and faster, impact for WTI will come from domestic production which is already yielding to the low prices. Last week 40 oil rigs in the US stopped working, after 19 were already shuttered the week before. A number of higher cost drillers in the US are teetering on the verge of bankruptcy and further closures are likely to follow like dominoes as the spread of the virus intensifies in the US.
The chart to look at for oil
For a look at where oil is likely to go over the next few weeks the chart to look at will be the John Hopkins University Global Corona Virus Chart (https://coronavirus.jhu.edu/map.html). The progress of the virus is putting a cap on all transport, and transport makes up close to 70% of the US domestic crude oil demand. While there is no national ban on movement, the restrictions across a number of states have already caused demand to drop to a fraction of its normal size. As the virus intensifies the demand picture will only worsen. No amount of talking with Russia will be able to change that over the coming weeks.
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