Hedging against growing risks in oil and gas lending
The price of oil is down more than 50 percent from where it was when the year started, with most of that collapse coming in March. We haven’t seen crude slide so far so fast since the first Gulf War in 1991, and we can expect more volatility at least in the near term.
Oil is being hit on both supply and demand. On the supply side, there is a price war between Russia and Saudi Arabia after they failed to reach an expected deal to cut production and maintain prices. The three-year partnership of OPEC + broke apart as a result. Both sides have stated they will flood the market with production to levels not seen before. On the demand side, COVID-19 has had a dramatic impact on travel (airlines, other transports, etc.) as countries respond to the virus and try to contain spreading.
About the AuthorFollow on Twitter Follow on Linkedin More Content by Lauren Harrell