Commodities | Economics & Growth
• Goldman’s global head of Commodities Research Jeff Currie gives his take on this week’s turmoil in the oil market.
• The coronavirus and oil price war between Saudi and Russia are not two new separate things, the price war can instead be thought of as a second-round effect of the virus.
• Saudi most likely opted to cut prices now because; 1) balance sheets of US oil producers are already damaged by demand weakness related to the coronavirus making it now easier to hurt producers 2) US sanctions on have had a substantial impact on Russia (Nordstream and Rosneft), particularly for gas. 3) Russia did not like the ultimatum Saudi imposed with the hoped-for production cut.
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