Weekly Report - 23 April 2020 (WR-20-16)

An unprecedented slump in oil prices, which tipped into negative territory for the first time in history on 20 April in the US over storage concerns, poses a huge challenge to Latin America’s oil-producing nations, especially Venezuela and Ecuador, as well as Colombia. It is also a serious blow to Mexico’s debt-ravaged state oil company Pemex, although, along with Brazil, Mexico is in a stronger position to weather price volatility in the short-term as it is far less reliant on oil revenue to balance its budget. In a sign of confidence in a swift recovery in demand after the worst of the coronavirus (Covid-19) pandemic is over, however, just the day after the oil price plunge, significant interest was registered in a contract to market the Guyanese government’s share of crude extracted from its massive Stabroek offshore oil block.

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