Oil prices keep falling recklessly: marvelous weekly decline
Oil is undoubtedly a royalty among other commodities, in both its production level and important in the international trade market. Crude oil is one of the most traded nonfinancial commodities today and supplies nearly 40% of global energy. Crude oil’s importance also stems from the fact that it’s the base product for several indispensable goods; including gasoline, jet fuel, and plastics.
However, these week oil prices have plunged to the lowest, as the rapid spread of the coronavirus stoked fears of slowing global demand. Also, investors are becoming more anxious. They are worried the epidemic could turn into a pandemic. Besides, the virus has already spread beyond its epicenter in China to other 47countries. Unfortunately, new infections of the coronavirus reported around the world were now surpassing those in mainland China, where more than 2,800 people have died.
Commodities depend on the event that takes place all around the world. It is no wonder that Oil prices are moving directly related to news flows around the avalanche of speculations and secondary cluster outbreaks.
As for the data, West Texas Intermediate crude oil futures fell USD1.33, or 2.8%, to USD45.76 per barrel. U.S. crude has fallen about an unfortunate 14% for the week, the biggest weekly decline since May 2011. As for the Brent crude, the contract for Mat hot a 14-month low and was down USD1.36, or 2.7%, at USD50.39 a barrel by 0445 GMT.
The Brent crude oil has been showing the steepest decline so far, as it fell about 2% on Thursday, has shed around 13% this week.
Oil markets expect steeper supply cuts
OPEC (the Organization of the Petroleum Exporting Countries) is already theorizing the nightmare scenario, which is a Brent crude under USD50 a barrel; with a decline like that, no one can say for sure that it won’t happen. As a result, OPEC is trying to take responsibility for a responsible approach in the wake of the virus outbreak. The organization is trying to contact producers and ask them to reduce the responsible approach in the wake of the virus outbreak. Productions and suppliers like Saudi Arabia and Russia are regarding crude oil supply reductions in China.
Oil is truly the lifeblood of the international economy. Moreover, without it, the modern world would come to a screeching standstill.
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