KPMG’s Global Head of Energy, Regina Mayor, offered the following statement on April 21 in response to this week's sharp decline in oil prices:
“The significant drop we're witnessing is a function of the expiry of the May contracts. This clearly shows the concerns in the market with the ability to take delivery and have a place to store oil as we move forward in the next few weeks. Additionally, while last week's OPEC+ agreement was necessary and seemed to set forth a structured way to put balance back into the market, further declines in forward contracts indicate that the expected cuts aren’t enough to level out the significant supply and demand imbalance and that prices may continue to decline. Continued storage concerns and a downward trending price environment could drive a significant level of production cuts in the U.S. market – possibly to the tune of greater than 3 million bpd. Uncertainty with how and when demand returns in the coming months will continue to be a key factor for prices as well.”
To speak with Regina Mayor, contact Megan Dubrowski.