[Dybbuk]

Isn't it obvious now?

The price is crashing because demand is crashing, because we're entering a depression due to COVID-19 dislocations.

When demand crashes, production crashes.

When/if production trends back up, it's never going to get back to where it was.

We're entering a world of new values, where we recognize insatiable consumerism as unsustainable and empty.

[rockdoc123]

either you are one of Shorts sock puppets or you have been asleep for the last week.
Pay attention....Saudi Arabia and Russia could not agree on production cuts, Russia walked away from the table and one day later SA lowered the price on all of their oil for shipment and the next day announced plans to increase spare capacity to 13.5 MMB/d. That is an increase in supply not an decrease in demand.

[Plantagenet]

There is both a decrease in demand AND an increase in supply.

Chinese oil imports dropped by 80% due to the Wuhan virus. That put a very significant dent into global oil demand. Now western economies are also slowing, further inhibiting oil demand.

At the same time, the Saudis and the Russians are flooding the market with oil.

The result? A dramatic drop in oil price.

I doubt this marks a permanent peak in oil production, unless the Saudis are able to drive the US shale oil producers into bankruptcy.

Most likely when the virus has done its worst the economy will enter a recession and then recover and continue to grow and oil demand and supply will continue to grow as well, at least for a while longer.

CHEERS!

[Pops]

When/if production trends back up, it's never going to get back to where it was.

What you said was obvious, to here. Why, if production can trend back up would it never get back to where it was?

We're entering a world of new values, where we recognize insatiable consumerism as unsustainable and empty.

LOL, that party is actually funny.
Insatiability is what got Homo to where he is, it's in us, it is us.
Not sure how we get it out.

[rockdoc123]

There is both a decrease in demand AND an increase in supply.

there was potential for decrease in demand for oil but the effects of China and Italy were already layered into the price by early March. This is why Russia and SA met in the first place as an attempt to try and raise prices. When that fell through SA took the opposite approach and flooded the market partially to get Russia in line but mainly because this was an opportune time to deal a devastating blow to US tight oil activities. The price fall on Monday from ~$46/bbl to a low of $32/bbl was all to do with the actions of SA whereas the prior very slow drop from ~$55/bbl to $46/bbl was a consequence of a predicted temporary decrease in demand. Note that following the drop to $32/bbl airlines were heavily impacted by the US ban on travel which should have a direct impact on demand temporarily....there was no additional decrease in oil price, the SA initiative having done enough damage by putting supply well above forecast demand. If SA and Russia were to come to a deal we would see oil immediately rebound back into the $45 range where it would bounce around for sometime until traders could get their heads around the actual impact of the virus on demand in various sectors.