As Coronavirus Lockdowns Ease, DBRS Morningstar Resets Outlook for Oil and Natural Gas Prices

March and April 2020 were two of the most challenging months that the global oil and gas industry has ever experienced. The unprecedented collapse in global crude oil demand—a decline in April of 25 million to 30 million barrels per day (b/d), or about 25% to 30% of global demand—was driven by a worldwide economic lockdown to contain the spread of the Coronavirus Disease (COVID-19). Global crude oil and refined product inventories ballooned, raising the specter that storage tanks might completely fill, causing crude oil and product prices to tank. To contend with this severe price environment, producers and refiners have drastically scaled back operations, reduced capital spending, cut dividends, and tapped accessible sources of liquidity.