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Oil prices would probably ‘stay down’ for months

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Oil prices would probably ‘stay down’ for months

On Monday, Oil prices started dropping amidst the spreading of the Coronavirus which has become a global issue, and energy market participants are concerned about the demand growth.

As reported by CNBC, International benchmark Brent crude traded at $58.55 per barrel Monday morning, falling more than 3.5%, while U.S. West Texas Intermediate (WTI) remained at $52.25, descending over 3.6%.

According to Chinese officials, there had been more than 2,700 confirmed victims of coronavirus, including 461 people in a crucial condition and the number of deaths have risen to 80.

The Chinese city of Wuhan started being affected from the virus first and it has spread to other major cities such as Beijing, Shanghai, Macao and Hong Kong, and now, more cases started emerging from other countries, too.

The ongoing fear that revolves around the virus has started affecting financial markets and prompting a sharp fall in oil prices.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said in a statement on Sunday that he was confident the outbreak would be contained. According to a Reuters report, he believes that the markets are “primarily driven by psychological factors and extremely negative market expectations adopted by some market participants despite (the virus’) very limited impact on global oil demand.”

(Reference: CNBC)
(Image source: KAZUHIRO NOGI | AFP via Getty Images)