Divining the short-term impact of the coronavirus outbreak on energy prices is tricky because of the multiple factors involved. Here’s a hint: it’s not good.
Last week’s hypothetical barrel at Mont Belvieu, Texas, fell to its lowest point in 21 weeks. Ethane and propane broke out of multiweek slumps, but comparisons to the same weeks in 2019—down 61.4% for ethane and down 42.5% for propane—are not encouraging.
The 2019 Novel Coronavirus outbreak is part of a global package deal of downers: Libyan oil production is down to about 204,000 barrels per day (bbl/d), compared to about 1.2 million bbl/d in 2011 prior to the country’s civil war, Bloomberg reported; while China buys no LNG from the U.S., it is the world’s biggest importer and the virus-related reduction in purchases will make it tougher for U.S. exporters to compete; and this winter’s polar vortex, which carried hopes to help power a surge in natural gas demand, has been MIA.