The unprecedented coronavirus infections has been spiking worldwide pushing oil prices to the lowest level since more than a year ago. The Brent crude oil and West Texas oil recorded lowest fall in Friday’s trades since December 2018, where the Brent price stood at US$ 50.52 per barrel upon delivery, while the American crude settled at US$ 44.76 pb. A report released by the International Energy Agency predicted decline of global demand for crude in Q1 2020, first time since the global financial crisis (2008-2009), due to dramatic spread of the deadly virus.
Amid the disease-related jitters gripping humankind, OPEC and the OPEC-plus alliance are due to hold special meetings on Thursday and Friday in Vienna. They are due to ponder prospects of further cut of the oil output to try re-balancing the market and stabilizing the prices. The 24-state coalition, including the organization member states and independent oil-rich countries namely Russia, agreed during a meeting on December 6 on further slash of the production by 500,000 barrels per day, effective start of this year till end of March 2020.
Meanwhile, experts believe that the oil prices in the near future will range between US$ 50-60 pb. Ahmad Hassan Karam, an oil expert, told KUNA that the US self-sufficiency of shale oil is one of the reasons for the oil prices decline, along with the virus spread, in addition to the controversial situation of the Chinese economy as well as the trade war between Beijing and Washington. He believes that the prices will fluctuate between US$ 50 pb and US$ 60 pb in coming months.
Meanwhile, Dr. Ahmad Al-Kouh, a professor of petroleum engineering at Kuwait University, told KUNA that the oil prices have recently hit the “worst levels” since 2008, amid “robust demand fall,” largely alluded to stoppage of many key facilities in China, epicenter of the coronavirus outbreak. He alludes to forecast that the producers might decide to slash the output by one million bpd, in addition to the current cut of US$ 1.7 million bpd. For his part, Dr. Abdulsamee Behbehani told KUNA that the oil prices have lost US$ 15 since January. He echoes’ his colleagues’ opinion that the prices are being largely affected with the situation in China, the world largest crude consumer.