How the Coronavirus Caused Oil Prices to Drop Below Zero

The video discusses the economic impact of COVID-19, starting with its initial effects in China and the global perception of a quick recovery. As the virus spread to Italy, markets began to decline. In March, oil prices fell sharply due to a failed production cut deal between Saudi Arabia and Russia, leading to a super contango. The WHO declared COVID-19 a pandemic, and despite efforts like a Fed rate cut, markets continued to suffer. By April, oil demand plummeted, storage filled up, and U.S. oil prices hit a record low. A global production cut was brokered, but it was too late to prevent the crisis.

What was the initial expectation for the economic recovery after the coronavirus outbreak in China?

• An L-shaped recovery

• A V-shaped recovery

• A U-shaped recovery

• A W-shaped recovery

What event in March caused oil prices to fall significantly?

• A new wave of COVID-19 cases in the US

• A failed production cut deal between Saudi Arabia and Russia

• A sudden increase in oil demand

• A major oil spill in the Gulf of Mexico

When did the World Health Organization classify COVID-19 as a pandemic?

• Early February

• Late March

• Late February

• Early March

What was the outcome of the global oil production cut deal brokered in April?

• No agreement was reached

• A cut of 5 million barrels per day

• A cut of 9.7 million barrels per day

• A cut of 15 million barrels per day

What unprecedented event occurred in the US oil market in April?

• Oil demand exceeded supply

• Oil prices reached a record high

• Oil prices hit a record low of negative $40

• The US became the largest oil producer