This Week’s Market Buzz

•    Oil posted the worst quarter on record after COVID-19/coronavirus crushed demand and raised fears about overflowing storage tanks amid a price war that has flooded the market with extra supply. Futures in New York edged higher at press time but still ended the quarter down more than 66%. While Brent and West Texas Intermediate futures held above $20 a barrel, the underlying, physical market flashed signs of distress. The gap between paper market trades and real barrels has widened to multi-decade highs in some cases, suggesting financial flows are supporting the futures market.

•    With the benchmark U.S. oil price at about $22 – down from the mid-$50s in January – shale-oil operators from North Dakota to Texas will lose money on new wells. Publicly traded frac sand firms with mines in Wisconsin and Minnesota have already been crushed. For instance, the shares of Covia and Hi-Crush currently trade around 67 cents and 27 cents, respectively, down from just over $20 and around $15 in mid-2018.

•    One out of five oil-field services jobs could disappear this year as decades-low prices and the coronavirus pandemic hammers the industry, according to a report from Norwegian research firm Rystad Energy. The oil-field services sector, including drilling rig operators to equipment manufacturers and hydraulic fracturing crews to offshore workers employs more than 5 million people worldwide. Rystad estimates that the current crude oil price downturn could cost the sector 1 million jobs worldwide.

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