May 8, 2020 - Energy & Environment

Coronavirus drives oil to a "rapid and brutal adjustment"

Ben Geman, author of Generate

Photo: Jonathan Raa/NurPhoto via Getty Images

The consultancy IHS Markit now expects roughly 14 million barrels per day of crude oil production worldwide to be "cut or shut-in" during the second quarter.

The big picture: IHS analyst Jim Burkhard, in a statement, said a "rapid and brutal adjustment of global oil supply to a lower level of demand is underway."

  • He said all producing nations are subject to the "same brutal market forces," but some will be more affected than others.
  • IHS calls the cuts the largest in industry history.

Why it matters: The fresh estimate is the latest eye-popping tally of how the collapse in demand is affecting oil markets.

  • A suite of U.S. companies are announcing major cutbacks. The latest came yesterday afternoon.
  • The independent producer EOG Resources said shut-in of existing wells will cut production this month by 125,000 barrels per day.

Go deeper: Big oil group API opposes special handouts in coronavirus crisis

Go deeper

Diverging services data suggests U.S. coronavirus recovery may be overblown

Data:; Chart: Axios Visuals

ISM's stronger-than-expected reading of U.S. services sector data grabbed headlines, but IHS Markit's index told a different story.

Flashback: In December, similar divergence popped up in the two indexes' manufacturing reports, but with ISM's data showing much weaker numbers — the worst manufacturing report in a decade.

Unpacking a surprise jobs report

Illustration: Rebecca Zisser/Axios

Can we trust this morning's surprisingly good employment report?

  • The short answer: Yes.

The emergency era of environmental policy

Illustration: Aïda Amer/Axios

Welcome to the crisis era of energy and environmental policymaking.

Driving the news: A new White House executive order, citing COVID-19, invokes emergency powers to accelerate and even waive some environmental reviews of infrastructure and energy projects.