IHS CERAWeek global energy conference canceled due to coronavirus threat

The deepening global crisis over the coronavirus outbreak caused the organizers of the annual IHS CERAWeek energy conference in Houston to cancel the event Sunday.

Delegates from 80 countries were expected at the conference March 9-13

With concern mounting in recent days about the spread of the deadly respiratory illness that was first observed in China in late December, IHS Markit said it had no choice but to cancel. Due to travel restrictions, delegates from China had already been not expected to attend.

The first-ever cancellation of the conference -- which since 1983 has brought together a veritable who's who of the energy world from OPEC oil ministers to government leaders to the chief executives of major natural gas, LNG, petrochemicals and power companies -- could spur another hit to oil futures when Asian markets open Monday.

"The World Health Organization raised the threat level on Friday, the US government canceled a summit meeting scheduled in Las Vegas, an increasing number of companies are instituting travel bans and restrictions, border health checks are becoming more restrictive and there is growing concern about large conferences with people coming from different parts of the world," IHS Markit said in a statement. "Our number one concern is the health and safety of delegates and speakers, our partners, our colleagues and vendors. We have spent the last several weeks focused on this question, established a medical partnership with Houston Methodist Hospital, have been in continuing dialogue with experts on infectious disease, and established an extensive protocol. But the spread of COVID-19 is moving quickly around the world."

Bob McNally, president of Rapidan Energy Group, said the cancellation is symbolically important but minor compared with the possible cancellation of the OPEC+ meeting in Vienna, still set for Thursday and Friday.

"Were that meeting and the expected large incremental cut to be canceled, [the hit] to prices would be much greater at least until OPEC+ announced a cut in the absence of a formal meeting. But for now OPEC+ seems to be going on," he said.

Crude oil futures settled at 14-month lows Friday as the continued global spread of coronavirus fed fears of flattening demand and raised the specter of economic downturn. ICE April Brent settled $1.66 lower at $50.52/b. NYMEX April WTI was $2.33 lower at $44.76/b.

After five straight declining sessions, front-month Brent and WTI were down about 14% and 16%, respectively.

S&P Global Platts Analytics has adjusted its 2020 global oil demand growth outlook down to 860,000 b/d, marking the weakest forecast since 2011.