Opec to discuss coronavirus as Chinese oil demand slumps

  • Opec to discuss coronavirus as Chinese oil demand slumps

Opec to discuss coronavirus as Chinese oil demand slumps

Global Oil prices have been battered over the past two weeks due to the rapid spreading of the novel coronavirus in China.

The move was the second-fastest plunge from recent highs over the past seven years, according to Dow Jones Market Data Group.

In the face of such castrating outlooks on crude oil futures' prices, OPEC+ was reported to arrange an emergency meeting as early as by this week, while markets were whispering about an extension of output curb by another 500,000 million barrels per day, which in effect would curb OPEC+ oil production by 26 million barrels per day. Traditionally during the New Year holiday, gasoline and jet-fuel demand increase as hundred of millions go back home, while gas and oil consumption drops as industrial activity slows.

On the Multi Commodity Exchange, crude oil delivery for March rose Rs 19, or 0.52 percent, to Rs 3,670 per barrel.

Another benchmark blend, West Texas Intermediate (WTI), also spiralled downward, dropping by as much as 3%, but later recovering somewhat to 2.4% below the 1 February closing prices.

The coronavirus is the latest blow to the USA shale industry that has struggled to stay profitable. The bank's global research team now has its 2020 global growth forecast at 3.1 percent.

Crude Oil Price Chart

The unusual appearance at the cartel's headquarters of Wang Qun, China's ambassador to worldwide organizations in Vienna, underscores how the outbreak has upended the global market. Last week, USA crude oil inventories posted a larger than expected build of 3.5 million barrels, according to the Energy Information Administration.

Prices are being underpinned slightly by a more positive tone in world markets that have been gripped by worries over the economic fallout from the spread of the coronavirus.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies could bring forward their March meeting to February to discuss the impact on oil demand from the virus flare-up.

Russian President Vladimir Putin and Saudi King Salman bin Abdulaziz discussed the global energy markets by phone Monday evening, the Kremlin said in a statement, adding that both leaders confirmed "readiness to continue cooperation within OPEC+".

Business activity in China is expected to decline, prompting Beijing to consider seeking flexibility on its trade deal with the US that's supposed to take effect this month, according to people familiar with the matter.