Posted on: 01. 31. 20
When serious illnesses begin to show their severity throughout the human population, it’s only natural for industrial markets to take financial hits. However, with the current rise of the coronavirus, the oil and gas industry is gearing up to face some economic hits that make current geopolitical industry issues pale in comparison.
What is Coronavirus?
Although coronaviruses have been a common occurrence since the 1960s, the recent strain that hails from Wuhan, China, is the first of its strain. The most recent coronavirus causes pneumonia and results in symptoms that include:
- Coughs
- Fever
- Difficulty Breathing
- Organ Failure
According to an article from The Guardian, “as of January 30, the death toll in China stands at 170, with 7,711 confirmed cases of infections.”
There has also been further confirmation of the virus in several other countries, including the United States. Since this is a viral disease.
Why it Matters to the Oil and Gas Industry
During a viral outbreak, even something as intangible as fear can have a negative impact on economic markets. When the fear of acquiring the disease takes hold of a population, travel to and from infected areas begins to take a steep decline.
When traveling patterns shift, so does the demand for oil. Even though oil prices already have significant threats on the horizon due to oversupply, demand has now been further reduced due to quarantines and general unrest.
We’ve Seen This Story Before
This is a pattern the industry has already lived through numerous times. Most recently, similar pricing issues were seen during the 2002-2003 SARS outbreak.
At this time in our industry’s history, oil prices fell nearly 20 percent. However, the instability was relatively short-lived as health organizations swiftly brought the disease under control.
Where Does Out Industry Stand Now?.
Currently, without a cure for the disease or relative control, the oil and gas industry will surely take a hit because China is one of the globe’s largest oil consumers in the market. Remember, oil demand growth keeps the market moving, and without use or purchases from one of the industry’s largest backers, the impact on total demand and pricing is something that we will all have to brace for.
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The oil and gas industry may always be shifting, but the team at Pro-Gas, LLC remains consistent with what we do! Our Dallas-based company provides the equipment necessary for facilities and drill sites to continue operations, despite the financial threats that loom in the distance.
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