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Photo: Carsten Rehder/picture alliance via Getty Images

This morning is bringing fresh and stark signs of how economic contraction from COVID-19 is crushing the oil market and forcing companies to cut back.

The big picture: The price collapse stems from COVID-19 freezing a significant amount of travel and economic activity, and the collapse of the Saudi-Russia agreement to limit production.

Threat level: "An OPEC+ supply surge and crumbling oil demand are leading to concerns about a surplus that could overwhelm global storage," BofA Global Research said in a note this morning (emphasis added).

Driving the news: The number of companies announcing spending and workforce cutbacks keeps growing.

  • This morning, the huge U.S. producer ConocoPhillips said it would cut $700 million from its planned capital spending this year and scale back its share buy-back program.
  • Oilfield services giant Halliburton is furloughing about 3,500 employees in Houston as oil producers slow operations, per Reuters.
  • "The sudden crash in global oil prices has prompted Australian oil and gas producer Oil Search to cancel sale talks and slash spending by up to $675 million by shelving projects around the world," the Sydney Morning Herald reports.
  • Argus Media's Ben Winkley, via Twitter, tallies several more announcements as they come "thick and fast."

What's next: Analysts are racing to update their estimates of how much global oil demand is cratering. Rystad Energy this morning sharply revised their projections from a week ago.

  • They now see year-over-year demand dropping 2.8 million barrels per day, which would be a 2.8% decline. A week ago they were projecting only a 600,000 barrel per day full-year drop.
  • "At the moment we expect the month of April to take the biggest hit, with demand for oil falling by as much as 11 million bpd year on year," the consultancy notes.

Go deeper

Updated 37 mins ago - Politics & Policy

Democrats call for briefing on legal justification for Biden's Syria strike

Sen. Tim Kaine. Photo: Erin Schaff-Pool/Getty Images

Sens. Tim Kaine (D-Va.), Chris Murphy (D-Conn.) and Rep. Ro Khanna (D-Calif.) are among the Democrats criticizing the Biden administration for Thursday night's airstrike against facilities in Syria linked to an Iran-backed militia group, demanding that Congress immediately be briefed on the matter.

Why it matters: The strikes, which the Pentagon and National Security Council say were a response to threats against U.S. forces in the region, constitute the Biden administration's first overt military action.

Updated 2 hours ago - Politics & Policy

Here come Earmarks 2.0

DeLauro at a hearing in May 2020. Photo: Alex Wong/Getty Images

The House Appropriations Committee is preparing to restore a limited version of earmarks, which give lawmakers power to direct spending to their districts to pay for special projects.

Why it matters: A series of scandals involving members in both parties prompted a moratorium on earmarks in 2011. But Democrats argue it's worth the risk to bring them back because earmarks would increase their leverage to pass critical legislation with a narrow majority, especially infrastructure and spending bills.

Ben Geman, author of Generate
3 hours ago - Energy & Environment

UN says Paris carbon-cutting plans fall far short

Illustration: Sarah Grillo/Axios

Nations' formal emissions-cutting pledges are collectively way too weak to put the world on track to meet the Paris climate deal's temperature-limiting target, a United Nations tally shows.

Driving the news: This morning the UN released an analysis of the most recent nationally determined contributions (NDCs) — that is, countries' medium-term emissions targets submitted under the 2015 pact.