Crash of crude oil The collapse of related companies and the economic and political instability of oil-producing countries

Crash of crude oil The collapse of related companies and the economic and political instability of oil-producing countries have also occurred on April 22, 19:32

Experts familiar with the energy situation are cautious about the decline in global crude oil prices, as a sharp decline in prices could lead to the collapse of oil-related companies and the economic and political instability of oil-producing countries.

Ken Oyama, a senior researcher at the Japan Institute of Energy Economics, said, "People's movements have been restricted due to urban blockades in Europe and the United States, and the demand for oil has fallen sharply. Recovery of demand depends on the convergence of the new coronavirus I can't see it, and this may mean that the demand for oil will decline by 9% to 10% in the world. "

Regarding the impact of the continued decline in crude oil prices, Senior Researcher Koyama said, "The impact on oil-related companies is large. American shale oil-related companies are many small and medium-sized companies, and if they failed, they would have borrowed money. Could turn into a bad asset, causing credit problems in the financial system and shaking the world economy. ”

Furthermore, “The decline in crude oil prices could lead to destabilization of oil-producing countries such as the Middle East, which depend on crude oil, and destabilize the national system. We must also consider the possibility that it will come. A significant drop in crude oil prices could lead to major problems that our lives cannot miss. ”

Limited benefits of low gasoline prices

The decline in crude oil prices is beneficial for consumers such as automobiles because it leads to lower gasoline prices, but the benefits are limited now.

The Petroleum Federation, which is made up of petroleum ex-sellers, has been in a situation in which the number of opportunities to drive a car has decreased and demand has not increased even if the gasoline price has dropped, despite the declaration of an emergency due to the spread of the new coronavirus infection. I think. We anticipate that demand for gasoline will continue to decline, even during large holidays, where the number of people traveling by car is increasing, as a result of avoiding unnecessary homecoming and traveling.

According to the Ministry of Economy, Trade and Industry, due to the drop in demand, some gas stations have reduced their sales volume by 20% to 30%, and some have shortened their business hours. If the spread of infection does not subside and the number of opportunities to use a car continues, we may watch the gas prices for crude oil prices, as there is a risk that gas stations will become difficult to manage.

London's first low in 21 years

While the prices of crude oil futures fell sharply, prices of crude oil futures also temporarily dropped to the level of 21 years in the London market on the 22nd.

On the 22nd, the futures price of North Sea crude oil traded on the London market fell to the high $ 15 / barrel, which is 17% lower than the previous day by 17% or more. This is the lowest price in 21 years since June 1999.

In addition, the WTI futures price in the New York market was temporarily declining in May instead of the negative May, and the June trading became the center of the transaction, and the barrel was sluggish at $ 11 / barrel at 6 pm Japan time. I am.

In the international crude oil market, demand has fallen sharply due to the impact of the new coronavirus, and there is a growing sense of oversupply, leading to a drop in prices in each market.

New Corona and Crude Oil Impact on Economy

In the crude oil market, the fall in demand due to the spread of new coronavirus infections has led to overproduction worldwide, and futures prices have continued to plummet.

On the 20th, the WTI May futures price, which is an international indicator in the New York crude oil market, plummeted from $ 18 / barrel last weekend.

In fact, there was an unusual situation in which the buyer fell out and the price fell negatively.

There was a situation close to a sell-off, so to speak, that even if you paid the money, you would like to get the crude oil.

Investors worried that the spread of the infection would limit economic activity, increase the stock of oil, and fill the tanks for storing crude oil in the United States, making it impossible to store it.

The turmoil in the New York crude oil market did not subside on the 21st, and WTI's June futures prices plummeted to the $ 6 level per barrel.

In London's crude oil market and Tokyo's as well, crude oil futures prices fell sharply.

The sharp fall in crude oil prices has created uncertainty about the future of the global economy, and the stock market is becoming unstable.

In the Tokyo stock market, the Nikkei Stock Average temporarily fell below 19,000 yen for the first time in two weeks.

As the spread of new coronaviruses continues to grow, it will be difficult for demand for crude oil to recover significantly.

For example, aviation demand. According to the IATA / International Air Transport Association, which is a member of the world's airlines, the number of flights operated around the world in the beginning of this month has decreased by about 80% compared to the beginning of this year.

In Japan as well, ANA and Japan Airlines have reduced the number of international flights this month by approximately 90% from the original plan and halved domestic flights.

Demand for automobiles is also declining. In March, the world's major automobile markets such as the US, Europe, China and India saw their sales fall by around 40% to 60% compared to the previous year.

Oil-producing countries that are faced with severe challenges

Oil-producing countries are under pressure to respond to the sharp fall in crude oil futures prices. This is because if the slump in crude oil prices continues for a long time, the government's finances and economy will be hit harder, and there will be serious consequences such as social unrest.

The Saudi Arabian-led OPEC = Petroleum Exporting Countries Organization and non-member oil producing countries such as Russia have already cooperated with 9.7 million barrels per day, which is about 10% of the world's crude oil production, on the 12th of this month to raise crude oil prices. We have agreed to reduce production and will start reducing production in May.

In addition, the United States, which is the world's largest oil producing country, is also expected to reduce production.

However, the IEA = International Energy Agency said that "there is no agreement to solve the sudden drop in demand in a short period of time from the supply side", and the current situation has caused a dramatic drop in demand due to the spread of new virus infections. It shows that it is difficult to balance supply and demand even if oil-producing countries reduce production.

OPEC and some of the non-member oil-producing countries had an informal videoconference on Tuesday to discuss how to respond to the sharp fall in crude oil futures prices, but Reuters reported that Saudi Arabia and Russia hold the key to the talks. Said that it did not participate and that no specific measures were taken, such as hastening the start of production cuts.

In addition, under the current situation where there is no clear agreement among oil-producing countries such as OPEC to cooperate with oil-producing countries that do not participate in the coordinated production reduction framework, they will continue to carry out additional production cuts themselves. By the way, there is a strong sense of caution that we will only lose market share unilaterally, and we are in a difficult situation.