At the time of this writing, the novel coronavirus (COVID-19) had spread to more than 200 countries, areas, or territories, impacting communities, disrupting supply chains, and striking fear in investors. Rapid containment measures to mitigate the spread of the virus had resulted in drastic reductions in transportation and other economic activity, leading to lower estimates for oil demand and downward pressure on oil prices.
Meanwhile, geopolitics exacerbated the situation for the oil and gas industry, as OPEC+ (OPEC and its non-OPEC allies) had failed to agree on extending oil production cuts beyond March 31, to stabilize oil prices. This triggered a breakdown in the group and led some members to threaten an increase in production, in a bid to compete for market share.
This heightened concern of a supply surge – while economists were estimating falling demand for oil – sunk oil prices to an 18-year low in mid-March. As of late March, oil prices were trading in the mid-$20/bbl range – down by about 60% from the 2020 peak in early January. Operators quickly responded with plans to cut E&P budgets, while some oilfield service companies activated employee furloughs and staff reduction plans.
For more on the COVID-19 impact, visit https://www.offshore-mag.com/business-briefs/coronavirus.
Stay well.
About the Author
David Paganie
Energy Conference Director
After 20 years with Offshore, David Paganie has transitioned into a new role within Endeavor Business Media as Energy Conference Director, effective Jan. 1, 2025.
He is still leading the event content, chairing the conference advisory boards and working with the conference teams for Offshore's events (Subsea Tieback and Deepwater/Topsides) as well as Microgrid Knowledge's events. His success in growing event content and securing senior level executives as speakers has led to him creating many of the best practices at Endeavor.
Paganie previously served as Chief Editor of Offshore magazine and Conferences Editorial Director. He oversaw the Offshore portfolio of print and digital editorial content and international oil and gas conferences. He also wrote the monthly Comment column for Offshore.
He previously served as Editor of Offshore Field Development International at ODS-Petrodata; and as an Analyst at Baker Energy. He holds a Bachelor of Business Administration degree with a specialty in finance from Ohio University.