OIL MARKET WEEK AHEAD Is there any shelter from Coronavirus

Apparently not, is the short answer.

With the first cases recorded in the US and Mexico, investors will be on tenterhooks to see how the illness progresses in the Americas and how much it will disrupt daily life and industrial production. It will also become clear if this week’s panic in the markets was justified. After being through the worst of the virus, China is beginning to return to some sort of normalcy just over a month since the first case was officially reported; businesses are beginning to reopen, and companies are again up and running, although below full capacity.

OPEC Vienna meeting amid sharp price decline

The week ahead will also bring together OPEC countries’ oil ministers in Vienna to discuss not if, but by how much, to cut production to stem the decline in oil prices. Brent crude plunged 13% during the course of last week to trade just below $50/bbl Friday, a level not seen since 2017. Although the OPEC technical committee has been calling for the cartel to extend existing cuts by 600,000, producers may well end up cutting even further. Saudi Arabia plans to export 500,000 bpd less to China in March and is now calling for an overall 1 million barrel cut by OPEC+ countries.

So far Russia has been resisting the push as it is currently facing its own problems. Russia’s stock market index had its worst selloff since 2008, plunging from 1,646 in January to just over 1,300 at the end of this week. For Russia, oil revenue makes up a vast part of its state budget and it may try and shift the burden of cuts to Saudi Arabia and OPEC to inflict the least amount of damage to its domestic economy.

JET FUEL: Suspended flights to China and new suspension to Italy to keep jet fuel low

Apart from the car industry one of the industries hardest hit by the outbreak of COVID-19 has been the airlines. A total of 24 top world airlines have suspended their flights to China and others have modified their flight schedules. British Airways and Air France don’t plan to fly into the country until the end of March, other airlines as far out as the end of June. Some of the flights to South Korea and within the country have been cancelled while some of Iran’s neighbours have suspended flights into and out of the country. Italy has also been on the airlines’ blacklist. With the virus hopping into more and more countries, suspensions will only increase and push the demand for jet fuel even lower. In the first three quarters of 2019 global jet fuel demand stood at around 8m bpd.

What	When	Why is it important
Monday 2 March, 01.45	China Caixin Feb manufacturing PMI	First Chinese manufacturing data for the period covering the spread of coronavirus. January PMI stood at 51.1
Monday 2 March, 08.55	Germany Feb manufacturing PMI	Expected to remain in contraction as in previous months
Monday 2 March, 14.45	US Feb manufacturing PMI	US manufacturing has been skirting just above contraction for the last few months
Tuesday 3 March, 20.30	US vehicle sales	Indicative of future transport demand
Tuesday 3 March, 21.30	API weekly crude stocks	The first weekly indicator of oil stocks ahead of the more reliable numbers by EIA on Wednesday
Wednesday 4 March, 15.30	EIA weekly crude oil stocks	See above. Last week they rose 452,000
Thursday 5 March	Vienna OPEC meeting	Members to discuss output cuts
Thursday 5 March 13.30	US jobless claims	Reflects the strength of the job market and is related to retail spending
Friday 6 March	Vienna OPEC+ meeting	Russia joins OPEC members’ discussion
Friday 6 March 07.00	German Jan industrial production	Correlates to industrial demand for oil in Europe
Friday 6 March 18.00	Baker Hughes US oil rig count	Last at 679, increase of 1 in a week
Friday 6 March 20.30	CFTC net oil positions	Changes in money managers’ oil positions

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.