Oil prices have been falling for months, and oil-producing countries are concerned that it will continue to fall.
Oil prices fell to the lowest level of many months on Monday. The energy market is concerned about the increase in demand, with the spread of coronavirus rumors and cases globally.
International Brent crude traded at $ 58.99 a barrel on Monday afternoon, down 2.8%, while US West Texas oil (WTI) fell over 2.7% to $ 52.70.
While oil traders watched the emergence of a deadly virus closely, both criteria fell to levels not seen since early October.
On Sunday, Chinese officials confirmed that the number of deaths rose to 80, with more than 2,700 confirmed cases of coronavirus, including 461 people in critical condition.
The virus, which started in Wuhan, China, spread to other major cities such as Beijing, Shanghai, Macau and Hong Kong.
China and the global financial markets have a common consensus that it would be correct to warn that the coronavirus’s ability to spread is strengthening, that this will frighten financial circles and lead to a sharp drop in oil prices.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Sunday that he is confident that the outbreak will be brought under control. It would not be expected that a structure based on petroleum will make another discourse!
In order to alleviate fears, despite the limited impact of this situation on global oil the attention is also drawn to the benefit of creating excessive negative expectations that markets react to psychological factors and some market participants try to manipulate.
As such, oil prices are falling and will continue to fall. Meanwhile, plans and actions of oil-rich countries to increase prices will continue. The main factor is that supply is more than demand with the simplest math calculation. We hope that these efforts do not pump up brutal moves and endanger the health of the world, all living things and future generations.
OPEC allies and other non-OPEC producers will continue their efforts to stabilize the oil market so that economies based on oil will not be disappointed.
The coronavirus in China, where oil prices are experiencing an unstoppable decline, pushed the emerging oil market to a place where it did not want, unless no cure for the epidemic and more weaknesses.
Despite all this it is not rational to expect prices to stabilize and start climbing again if OPEC drops its production by 29 million (daily barrels).
The World Health Organization (WHO) says that the virus that spreads from person to person through contact is “an emergency in China”, but has not yet become a global emergency.
Currently there is a barrel price below $ 60 and this is the point reached despite all supply management restrictions accepted by OPEC and non-OPEC member countries and all the geopolitical problems experienced last year.
In the light of the above, last year and what is still happening do not indicate a positive direction for the oil price.