Why Oil Stocks May Never Recover From the Coronavirus Crisis
The oil business has had a rough year in 2020, to say the least. The COVID-19 pandemic has forced millions of people across the globe to shelter in place, reducing travel and therefore consumption of oil.
In the first quarter of 2020, the U.S. Energy Information Administration (EIA) predicts that global oil demand will have dropped from 100.7 million barrels per day in 2019 to just 94.4 million barrels in the first quarter of 2020. Some analysts even predict that demand is down 35 million barrels per day in late March and early April, leading to the absolute rout in oil prices that you see below. Strangely enough, the EIA also predicts that global oil demand will jump to 101.9 million barrels per day in 2021, implying a fast recovery. But I think we're seeing that's an optimistic projection, and investors should brace for a structural change in oil markets for years to come.
Source Fool.com