Meanwhile, Goldman thinks the oil industry will be stronger due to the virus: File Image/PixaBay
Continued promising outcomes of experimental coronavirus treatment drugs were no match on Monday for crude traders’ fear of the pandemic and of the Saudi Arabia–Russia price war showing no signs of abating: their consternation led to Brent falling to its lowest level in 18 years.
However, Goldman Sachs now thinks the oil industry will emerge from the pandemic stronger than it is currently.
Brent on Monday traded at $22.58 per barrel, down $2.19 and 8.8 percent, while West Texas Intermediate stood at $20.10, down $1.41 and 6.5 percent lower.
As long as there is capital, companies can withstand difficult periods
Jeff Currie, Goldman Sachs
Lachlan Shaw, head of commodities research at National Australia Bank, said with world crude demand now forecast to drop 20 percent from last year, massive production cuts will be needed beyond just the Organization of the Petroleum Exporting Countries.
However, not all news on Monday was gloomy, either on the oil or the coronavirus fronts: Goldman Sachs stated that “Big Oils will consolidate the best assets in the industry and will shed the worst….when the industry emerges from this downturn there will be fewer companies of higher asset quality, but the capital constraints will remain.”
Jeff Currie, global head of commodities research for the bank, noted that such a restructuring is overdue: “We have long argued that it is the supply and demand of capital that matters, not the supply and demand of barrels; as long as there is capital, companies can withstand difficult periods and the barrels always come back.”
Meanwhile, The Daily Mail reported that two coronavirus patients in New York City were treated with a new drug intended for HIV and cancer and went from being on ventilators in the ICU to regular hospital in a matter of days.
Leronlimab from CytoDyn has only been tested in seven critically ill patients but two are now free from ventilators and two more show signs that the severe inflammation sending their lungs into organ failure are subsiding; if the drug continues to show promise it could get FDA approval in as little as little as six weeks.
Also, the UK‘s independent fact checking charity fullfact on Monday verified reports that China on March 10 closed the last two of 16 makeshift hospitals in Wuhan where the virus originated, and that researchers from several institutes including the Erasmus Medical Center in Rotterdam have published a paper outlining a neutralizing antibody for the new coronavirus.