Coronavirus fears have continued to bind economies worldwide as global demand for oil is forecast to shrink for the first time since 2009. Oil prices fell Monday by the highest percentage in one day since the 1991 Gulf War. This is due in part to the effects of Coronavirus and the economic slowdowns related to it, but more directly because of recent actions taken by OPEC nations in what’s shaping up to be an oil price war between leading oil producing nations. The AP has a break down of what led up to this pricing clash and what it means for global energy markets.
Meanwhile, in New Mexico; the slowing demand for oil production is impacting local producers and cutting into the state’s hefty oil surplus. Citing the need to be fiscally conservative in the face of potential downturns in oil revenue, Governor Lujan Grisham has vetoed nearly $50 million in statewide transportation project funding approved by the Legislature. But a loss of road funding is far from the biggest issue facing NM. Houston-based energy company, Occidental Petroleum Corp. will cut spending the Permian region by more than $1 billion this year, and they aren’t alone. Parsley Energy Inc., an exploration and production company active in the Permian Basin also announced it will scale back operations amidst the global oil glut. This is all ominous news for New Mexico after a record year of oil revenue that led the democratic majority to approve a sizable spending increase in the legislative session. Read more HERE.