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The fall in global oil demand from COVID-19 along with recent
oversupply are driving a fast and deep drop in oil prices. Initially, the
price dropped 12 percent in the first 13 days, following a pattern similar to
declines after the SARS outbreak (2003), the attacks on the World Trade
Center (9/11), and the Lehman Brothers collapse (2008). However, since March
9, the decline has been steeper, as Russia and Saudi Arabia have failed to
agree to a reduction in supply. Twenty-five days into the COVID-19 crisis
(March 23rd), oil prices have declined 58 percent to about 21.96$ per barrel.
In contrast, the Lehman crisis reached this low point after 59 days, and the
2014 oil price collapse reached it in 139 days. An agreement between
oil-producing nations to curb production could prevent a further fall in
prices, though weak global demand will keep prices bearish for longer.
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Stay Informed
The Conference Board COVID-19 Hub. The Conference Board is
uniquely positioned to provide the C-Suite with a 360° view of implications
for business and insights on what’s ahead related to the COVID-19
Coronavirus. Visit this page often as new resources are being added to help
you effectively and confidently navigate this quickly evolving situation.
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