News Oil weakened by the virus and the possible reaction...

Oil weakened by the virus and the possible reaction of OPEC

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Brent fell 13 cents to 58.16 dollars and WTI dropped 58 cents to 51.56 dollars.

Oil prices continued to decline further on Friday, heckled by concerns over the coronavirus epidemic in China and the increasing possibility of an advanced OPEC meeting.

In London, a barrel of Brent North Sea crude for March delivery fell 13 cents, or 0.2%, to close at $ 58.16, its lowest level since October, well below 68.91. dollars reached in early January.

Over one month, it lost 11.9%, recording its largest drop since November 2018.

In New York, the American barrel of WTI for the same maturity dropped 58 cents, or 1.1%, to finish at 51.56 dollars, its lowest level since early August. In early January, it was still trading at over $ 63.

In one month, the WTI lost 15.6%, its worst fall since May 2019.

Investors fear the consequences of the viral pneumonia epidemic that started in Wuhan, central China, in December, before spreading across the country and abroad.

To date, the coronavirus has killed 213 people and contaminated nearly 10,000 patients in mainland China. 120 cases have also been reported in some 20 other countries.

The scale of the quarantine measures imposed by the Chinese authorities, as well as the suspension by many airlines of their connections with the country, “pose a major economic risk” for China and the entire world economy, as well as ” for oil demand, ”said Yujiao Lei, consultant for Wood Mackenzie.

“Since preventive measures focus mainly on aviation and public passenger transportation, demand for kerosene will be most affected,” she said.

In total, the expert anticipates, Chinese demand for oil could drop by 250,000 barrels a day in the first quarter. Taking into account the other countries, world demand over the same period could be cut by 500,000 barrels per day.

In this context, the markets are increasingly echoing the possibility that the Organization of the Petroleum Exporting Countries (OPEC) and its partners meet earlier than expected to try to adjust as best and as quickly as possible their production to support black gold prices.

The Russian Minister of Energy confirmed this idea by acknowledging on Friday that the epidemic could “lower demand” for hydrocarbons.

While the cartel and its partners are expected to meet in early March to discuss the deal committing them to limit their black gold extractions, he said they could meet “sooner”.

“We can meet very quickly if necessary,” said Alexandre Novak, adding that everything was still “under discussion”.

“We are ready to react to these things there, but for that we must precisely assess the situation and monitor its development over several days,” he said.

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