Oil Price Slide Continues as Coronavirus Slows Business
Following falling demand in markets from the growing coronavirus, Crude futures fell Sunday evening.
Due to rising health concerns, a key industry event in Houston canceled.
IHS Markit said in a statement that the US government canceled a summit meeting scheduled in Las Vegas. A growing number of companies are instituting travel bans and restrictions. Additionally, border health checks are becoming more provisional. Thus, there is increasing concern about large conferences with people coming from different parts of the world.
IHS Markit has also canceled two other global conferences this month scheduled for New Orleans and Long Beach, California.
Kevin Book, managing director of ClearView Energy Partners in Washington, said that when the oil industry itself is causing to cease travel and canceling conferences, it’s an ‘asterisk year’ for demand.
Coronavirus Crisis is Causing a Dramatic Price Decline
The price of Texas intermediate oil (WTI) dropped at $2.33 in New York. This makes $44.74 a barrel, struck by the fear of the expansion of the coronavirus.
According to operators, the fall in the price, almost five percent, contributed to the cumulative fall in the week. This amounted to 16 percent, the largest in more than a decade.
In the London market, Brent oil from the North Sea said goodbye to the session at $50.49 a barrel, which meant a 3.2 percent withdrawal.
Meanwhile, in Venezuela, a basket of crude oil prices ended at $44.85 a barrel, according to the Ministry of Petroleum of the country.
The significant decline in demand for oil in China, the largest city importer, as a result of the coronavirus crisis causing a dramatic price decline. Analysts agreed that the fear coronavirus instilled fear in investors. They believe it will spread across China and other countries. Additionally, they feel it will decrease global demand and shock the market, causing prices to sink.
Markets ignored the information released this Friday, that US crude production fell to 12.78 million barrels per day in December from 12.86 in November.
In New York, gasoline futures contracts, with a supply date in April, declined eight cents on Friday, to $1.48 a gallon.
The price of fuels has plummeted in recent days, placing diesel at its lows since August 2017 and gasoline since January 2019, according to data from the European Union Oil Bulletin.
With this fall, the sixth consecutive week, gasoline is 5.3% cheaper than a year ago, while diesel costs lowered 12.5%.
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