The disputes between Saudi Arabia and Russia over oil prices collapsing. In addition to this dispute, there is also a decline in product consumption due to the new coronavirus, which has been pushing the global economy into recession, a movement that should catch Brazil in a very fragile situation. Analysts say the crisis between the government and Congress, the target of a demonstration encouraged by President Jair Bolsonaro, scheduled for March 15, increases distrust of the country.
2019 is going to be a tough year for Petrobras. Due to the economic effects of Conav-19, there was a drop of 24% in the international price of oil. This led the Brazilian state-owned company to lose about 80 billion reais in market value on the Brazilian stock exchange B3 until 06.03.2020.
Now, with the dispute between Russia and Saudi Arabia influencing oil prices, even more, Petrobras has been hit again. Since the beginning of the year, Petrobras has seen the prospect of annual cash generation falling by 20 billion dollars.
Earlier today, the Ibovespa registered a sharp drop in Petrobras' shares (PETR3; PETR4), which fell 23%; Vale (VALE3), which fell 8%; and banks, which also fell 8% as oil prices plunged up to 30% after Saudi Arabia lowered the prices of the commodity and with projections of a drop of up to $ 20 a barrel.
According to the website Infomoney, "Petrobras' ADRs, on the NYSE pre-market, dropped by up to 20%, Vale's were down 22% and Itaú's were down by around 10% on a day of a general downturn in the stock market".
Earlier this morning, the Brent-type oil futures contract, which serves as a benchmark for the prices charged by Petrobras, dropped 19.9% to 36 dollars a barrel on the London Stock Exchange.
