CERAWeek is one of the biggest oil and gas industry events, featuring more than 800 speakers and 5,500 attendees from nearly 100 countries who get together in Houston, TX for five days each year. But this year's event has been cancelled, according to a March 1 announcement by its organizer IHS Markit. 

The reason cited for cancelling CERAWeek at the last minute, less than two weeks before it was scheduled to start on March 9, was COVID-19, the strain of coronavirus that's rapidly spreading around the world. Over the past week, coronavirus outbreaks have rapidly spread outside of China and Asia, with multiple deaths being reported in the U.S. in the past few days. 

Crowd of people wearing medical facemasks.

Image source: Getty Images.

The cancellation of this event may not have direct material impacts on oil and gas company operations, but Houston-area businesses, including restaurants, hotels, and other companies that count on conventions, will lose out on an expected $5 million in business. 

Oil markets reeling

The oil and gas industry was already feeling the impact of coronavirus well before IHS Markit decided to cancel CERAWeek. In recent weeks, the International Energy Agency warned that global crude oil demand would likely fall in the first quarter due to China's steps to curb the spread of coronavirus that would cut its domestic consumption of oil. 

As a result, oil prices plummeted, at one stretch falling for six consecutive trading days. Oil stocks have also fallen sharply as a result of the crude sell-off.  Even after rebounding to start March, Brent crude oil futures are still down more than 25% from the early January peak, along with the share prices of many oil and gas stocks. 

At this writing, the Energy Select Sector SPDR ETF (XLE -1.63%) has lost more than 20% of its value, driven lower by sharp declines by industry heavyweights including ExxonMobil (XOM -1.17%) and Chevron (CVX -1.81%)

XOM Chart

XOM data by YCharts

Combined, ExxonMobil and Chevron make up well over 40% of the Energy Select Sector SPDR ETF, but they aren't the only energy companies dragging the sector lower. The group of stocks that make up the next 25% of this ETF have all lost between 26% and 34% of their value over the same period. 

OPEC and some of its partner-countries including Russia, are expected to announce major production cuts soon in an effort to stabilize oil markets, but with the full economic impact of coronavirus still unclear as governments accelerate efforts to curb the spread, 2020 is shaping up to be a very volatile year.