Oil plunges 6% after Trump’s spontaneous announcement
Oil started tumbling down when the president of the United States, Donald Trump, made an announcement stating that there would be restrictions on travel from Europe. Notably, this is an attempt to dilute the spread of coronavirus after the World Health Organization declared that the ongoing Coronavirus outbreak as a pandemic.
The dip in Oil was partially caused by the threat of an array of cheap supply after Saudi Arabia and the United Arab Emirates said they would increase output in a stand-off with Russia, as reported by Reuters.
Brent crude LCOc1 dropped $2.29, or 6.4%, at $33.50 a barrel by 1501 GMT whereas the U.S. crude CLc1 descended $1.66, or 5%, at $31.32.
Apart from Oil, Global equities were also affected after President Trump stated that the United States would halt all travel from Europe excluding Britain and Ireland, as Trump is taking measures to lessen the impact of the coronavirus.
“It leads to further loss of confidence in governments’ handling of the fallout and increases uncertainty about the extent of the virus impact on the overall economy, reflected in sharp falls in risk assets across the board this morning,” stated Bjoernar Tonhaugen, head of oil markets at energy consultant Rystad.