PODCAST: Expect global recession, disruption to chemicals after oil crash - consultants

Author: Will Beacham

2020/03/09

BARCELONA (ICIS)--The oil price crash and coronavirus will trigger a global recession as oversupply and poor demand disrupt chemical markets, two senior consultants said on Monday.

"We’ve always said that oil is overpriced at $50bbl – there is an enormous amount of excess supply and a collapse in demand. There are parallels to 1985/6 when oil went from $30/bbl to $10/bbl and stayed there more or less for 15 years," said International eChem chairman Paul Hodges.

Hodges, who forecast the price crash a week ago in a blog post, believes that coronavirus is simply the trigger to a forthcoming crisis caused by central bank mismanagement and driven fundamentally by the demographics of an aging population globally.

ICIS senior consultant, Asia, John Richardson added: "We can expect global recession, but could it also morph into a financial crisis? Lower crude means lower costs for naphtha operators, but what about volume? We are looking at negative growth across most chemical products."

Listen to this podcast interview by Will Beacham.